VAT compliance software UK: Avoid costly VAT deadline mistakes

What HMRC requires under Making Tax Digital

Every VAT-registered business must follow Making Tax Digital for VAT, unless HMRC has given it an exemption. There are three parts:

• Digital records: keep a digital record of your sales and purchases and the VAT on them. A spreadsheet counts.
• Digital links: figures must move from your records to your VAT return digitally. Retyping them, or copying and pasting them, does not count as a digital link.
• Compatible software: you must file your VAT return through software that works with Making Tax Digital. HMRC's old online VAT form has closed for almost all businesses.

You can check which products work with MTD on HMRC's software finder.

VAT deadlines and what missing one costs

Your VAT return and any VAT you owe are usually due 1 calendar month and 7 days after the end of each VAT period. For a quarter ending 31 March, that is 7 May. Your exact due dates are shown in your HMRC online account and in MTD software.

• Late returns: each late return earns one penalty point. At 4 points for quarterly filers (5 for monthly, 2 for annual) you pay a £200 penalty, and £200 more for each late return after that.
• Late payment: if VAT is still unpaid after 15 days you pay a penalty of 3%, a further 3% after 30 days, then 10% a year, plus late payment interest.
• Nil and repayment returns count too: a late nil return still earns a point.

For the full rules, see our guides to VAT return deadlines and VAT penalty points.

What VAT compliance software should do

Your spreadsheet is fine, with bridging software

You do not have to give up your spreadsheet to be compliant. HMRC accepts spreadsheets as digital records. The only gap is the last step: you cannot retype or paste the totals into HMRC yourself.

Bridging software closes that gap. You keep a VAT summary in your spreadsheet, save it as a CSV, and the software checks it and sends it to HMRC. Read more about how bridging software works.

Common compliance mistakes and how to avoid them

• Retyping figures into a form: this breaks the digital link. Import them from your records instead.
• Filing for the wrong period: pick the open period your software pulls from HMRC rather than typing dates in.
• Pence in Boxes 6 to 9: these boxes take whole pounds only, and HMRC rejects the return if they do not.
• Leaving it to the last day: a rejected return does not count as filed, so leave time to fix any error.
• Forgetting a nil return: you must still file if you had no VAT to report.

See what HMRC checks before accepting your VAT return for the errors you are most likely to see.

How Swift VAT Pro keeps you compliant

1. Connect to HMRC once with your Government Gateway sign-in. Your open VAT periods and due dates appear straight away.
2. Get reminded: reminder emails arrive 4 days and again 3 days before each due date.
3. Upload your figures as a CSV from your spreadsheet or accounting system. Swift VAT Pro works out Box 3 and Box 5.
4. Check before sending: every box is checked against HMRC's rules, and any HMRC error is explained in plain English.
5. Submit and keep proof: HMRC's receipt reference is saved with every return, alongside your VAT liabilities and payments from HMRC.

For accountants and bookkeepers

If you file for several clients, one login covers them all. You can switch between clients, see each one's open periods and due dates, and keep every return and receipt in one place. The Small Practice plan covers up to 20 businesses and the Agent plan up to 100, with several users on each.

What it costs

• Single, £5 a month: one business, with one submission every 30 days included, which covers a quarterly return.
• Small Practice, £20 a month: up to 20 businesses and 3 users.
• Agent, £50 a month: up to 100 businesses and 5 users.

Every plan has a 7-day free trial with no card needed. See the pricing page for annual prices.

Final thoughts

Staying compliant comes down to three things: digital records, a digital link to your return, and filing on time through MTD software. You can do all three from the spreadsheet you already use. Choose software that checks your figures and reminds you before every deadline, and missed deadlines stop being a risk.

Disclaimer: This guide gives general information, not advice for your business. If you are unsure how the rules apply to you, speak to an accountant or contact HMRC.