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How to File a Nil VAT Return with HMRC

A business can file a Nil VAT return with HMRC when it is registered for VAT but has:

  • Made no sales
  • Made no purchases

Even though a business has no VAT to pay, if it is registered for VAT it must meet all VAT filing deadlines. Otherwise, HMRC may impose penalties for missed VAT returns and unpaid VAT, under the assumption the business has a VAT bill. Nil VAT returns can be most common for newly set up businesses or those that are stopping trading but haven’t deregistered for VAT yet.

How to File a Nil VAT Return

All VAT returns must be filed in line with the rules of making tax digital, meaning returns need to be sent to HMRC from an approved bookkeeping software such as Xero, including nil VAT returns. To file your nil VAT return you’ll need to take the following steps:

  1. Login to your bookkeeping software;
  2. Open up the VAT return for the quarter you need to file your nil return for;
  3. Make sure 0.00 appears in each of the boxes on the VAT return;
  4. Submit your return to HMRC.
File Nil VAT return
Nil VAT Return