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HMRC internal manual

VAT Accounting Manual

Accounting for VAT: VAT returns - legal position

The legislation governing returns and payments is contained in section 25 of the VAT Act 1994 and regulations 25, 25A and 40 of the Value Added Tax Regulations 1995.

Regulation 25 governs the making of returns, in particular:

  • the length of VAT returns;
  • when they are due (including first and final returns); and
  • the information they must contain.

On each return, a business must:

  • account for the total VAT due for the return period and at the same time remit the net tax payable;
  • supply full information on all other matters specified in the return;
  • sign a declaration that the return is true and complete; and
  • submit the return not later than the due date (see VATAC1300).

Regulation 25A determines how returns must be made - see VATAC1200.

Regulation 40 governs payment of VAT.

A reference table summarising the main legal provisions for VAT returns and payments is at VATAC1700.

Period length

The standard return period is three months, but monthly returns are normally allowed for regular repayment traders. A business may be compulsorily directed to submit monthly or annual returns where it is considered necessary to protect the revenue.

Varying the length of an accounting period

Under regulation 25(1)(c), HMRC may vary the length of a VAT period. For example, this power is often used to create a long first period following registration. Where the length of a period is varied, whether to create a long first period return or for any other reason, the business should be notified of this, and it is best practice for the notification to cite the legal power under which the direction is made.