Top Reasons Why HMRC Might Reject Your VAT Return

Submitting your VAT return is a critical responsibility for any VAT-registered business in the UK. Yet, despite best efforts, many businesses face the frustrating situation of having their VAT return rejected by HMRC. Rejections can lead to delays, penalties, and even investigations. Understanding the HMRC VAT return rejection reasons can help you avoid these issues and stay compliant.

In this article, we’ll explore the most common causes of rejection, provide real-world examples, and share tips on how to avoid mistakes in the future.

1. Incorrect VAT Registration Number

One of the most common HMRC VAT return rejection reasons is an incorrect VAT registration number. If the number is entered incorrectly or does not match the business records held by HMRC, the system automatically rejects the submission.

Tip: Double-check your VAT number before submitting. If you’ve recently registered or changed business structure, ensure you’re using the correct and updated number.

2. Missing or Incomplete Information

HMRC requires all mandatory fields to be filled correctly. Leaving out important information, such as your accounting period dates, total VAT due, or total sales, can cause your return to be rejected.

Tip: Use accounting software that alerts you about missing information before submission. This helps eliminate one of the key HMRC VAT return rejection reasons.

3. Filing for the Wrong Period

Businesses sometimes submit VAT returns for the wrong accounting period, especially if they are new to the VAT process or have recently changed their filing frequency. HMRC cross-checks your return with their records, and mismatched periods will result in rejection.

Tip: Always verify your VAT period dates against your HMRC account before filing. This avoids confusion and helps prevent common HMRC VAT return rejection reasons.

4. Errors in Calculations

Manual entry of figures, especially if done on spreadsheets or without automation, can lead to miscalculations. Discrepancies between total sales, VAT charged, and VAT due can trigger a rejection.

Tip: Automated accounting software not only calculates figures but also validates them before submission, reducing the risk of rejections.

5. Submitting Outside the Deadline

Submitting your VAT return after the deadline doesn’t just risk a fine—it can also result in your return being temporarily rejected until HMRC updates their records.

Tip: Set calendar reminders and use software that alerts you when deadlines are approaching. Delayed submission is one of the underestimated HMRC VAT return rejection reasons.

6. Duplicate Submissions

Accidentally submitting the same VAT return twice can confuse HMRC’s system, triggering a rejection of the second submission. This is common when businesses are unsure whether the first submission went through successfully.

Tip: Always wait for a confirmation receipt from HMRC before submitting again. Avoiding duplication is a smart way to dodge some of the most avoidable HMRC VAT return rejection reasons.

7. Using Non-Compatible Software

As part of the Making Tax Digital (MTD) initiative, HMRC only accepts VAT returns submitted via compatible software. Using outdated or unsupported tools may lead to instant rejection.

Tip: Check HMRC’s list of MTD-compatible software regularly and ensure your current system is on the list. Software incompatibility is becoming a more frequent item on the list of HMRC VAT return rejection reasons.

8. Mismatched Figures with Previous Returns

If your current VAT return includes figures that are significantly different from your previous returns without any clear explanation, HMRC might flag or reject it for review.

Tip: Provide notes or supporting information if large changes have occurred. A sudden drop or increase in VAT liability is one of the common HMRC VAT return rejection reasons, especially for seasonal businesses.

9. Wrong VAT Scheme Applied

There are various VAT schemes (Flat Rate Scheme, Annual Accounting Scheme, Standard VAT Accounting, etc.), and each has its own submission rules. Applying the wrong scheme or switching schemes without informing HMRC can lead to confusion and rejection.

Tip: Keep your records updated with HMRC if you switch schemes. Inappropriate scheme usage remains one of the lesser-known but serious HMRC VAT return rejection reasons.

10. Technical Issues on Submission Portal

Sometimes the reason isn’t human error, but a technical glitch on the submission platform or HMRC’s server. In such cases, even correctly filed returns may bounce back.

Tip: If your submission fails, check the HMRC service status page before retrying. While rare, technical issues still make it into the broader category of HMRC VAT return rejection reasons.

11. Inaccurate Bank or Business Details

Providing outdated or inaccurate business or bank details can cause HMRC to reject your VAT return or delay your VAT refund.

Tip: Update your HMRC account whenever your business details change. Overlooking this is an easily avoidable example of HMRC VAT return rejection reasons.

12. Using the Wrong Accounting Method

Confusing cash accounting with accrual accounting—or vice versa—can lead to errors in how VAT is reported. This mismatch often triggers rejections, especially if your records don’t align with your chosen method.

Tip: Clarify your accounting method and ensure consistency. Accounting method errors fall under technical HMRC VAT return rejection reasons, but they are just as disruptive.

13. Failing to Sign Up for MTD

If your business is required to follow Making Tax Digital but you haven’t signed up or aren’t submitting through the correct process, your VAT return will be rejected.

Tip: Sign up for MTD on time and use proper digital links. Non-compliance with MTD rules is fast becoming one of the top HMRC VAT return rejection reasons.

14. Authentication Errors

Your Government Gateway ID and credentials must be valid and active. If there’s a mismatch or your access has expired, the return won’t go through.

Tip: Check that your credentials are up to date. This small oversight remains a surprisingly common item on the list of HMRC VAT return rejection reasons.

15. Submitting Without Proper Authorization

If someone else is submitting your VAT return on your behalf (such as an accountant or bookkeeper), they must be authorized by HMRC. Without that authorization, the return will be rejected.

Tip: Make sure all agents are properly registered. Mismanaged authorization ranks among the administrative HMRC VAT return rejection reasons that can delay your compliance efforts.

Final Thoughts

Understanding these HMRC VAT return rejection reasons is key to ensuring smooth and timely VAT return submissions. Repeated rejections waste time and can lead to compliance issues, penalties, and unnecessary stress. Whether you’re handling your VAT return in-house or outsourcing it, being aware of these rejection triggers empowers you to fix issues before they arise.

From technical errors and outdated information to software problems and missing details, each reason is avoidable with the right systems and habits in place.

To ensure your VAT returns are accurate and compliant, consider working with experienced professionals or investing in robust accounting software. Prevention is always cheaper than correction, especially when dealing with HMRC.

Contact us today to learn more about how we can help with your bookkeeping needs.

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