Monthly vs Quarterly VAT Returns: Which is Best for Your Business?

3 Jul 2024
Olya Danilova

VAT Product Manager

When it comes to managing VAT returns in the UK, businesses have the option to submit returns either monthly or quarterly. Each option has its advantages and disadvantages, and the best choice depends on your specific business needs. In this blog post, we'll explore the differences between monthly and quarterly VAT returns, helping you decide which is the best fit for your business.



What Are VAT Returns?

VAT returns are periodic submissions to HM Revenue and Customs (HMRC) that detail the VAT a business has charged on sales (output tax) and the VAT it has paid on purchases (input tax). The difference between the output tax and the input tax determines the amount payable to or refundable from HMRC.

For help on how to submit a VAT return, see the website here.

Monthly VAT Returns

Monthly VAT returns involve submitting your VAT return to HMRC every month. This option is beneficial for businesses with specific cash flow needs or those that frequently reclaim VAT.

Advantages of Monthly VAT Returns
  1. Improved Cash Flow: Businesses that regularly reclaim VAT may benefit from quicker refunds, improving their cash flow.
  2. Frequent Adjustments: Regular submissions allow for more frequent adjustments, reducing the impact of errors.
  3. Better Financial Management: Monthly returns can lead to more accurate and up-to-date financial records, aiding in better financial management.
Disadvantages of Monthly VAT Returns
  1. Increased Administrative Burden: Submitting VAT returns every month increases the administrative workload.
  2. Higher Costs: The increased frequency of submissions can lead to higher accounting costs.

Quarterly VAT Returns

Quarterly VAT returns involve submitting your VAT return to HMRC every three months. This is the most common choice for UK businesses and suits those with more stable cash flow needs.

Advantages of Quarterly VAT Returns
  1. Reduced Administrative Burden: Fewer submissions mean less administrative work and lower accounting costs.
  2. Simplified Management: Managing VAT on a quarterly basis can be less complex and less time-consuming.
  3. Better Planning: Quarterly returns allow for more strategic financial planning and budgeting.
Disadvantages of Quarterly VAT Returns
  1. Delayed Refunds: Businesses that reclaim VAT may experience delays in receiving refunds, impacting cash flow.
  2. Potential for Larger Adjustments: Errors or adjustments are identified less frequently, which can lead to larger corrections needed in each return.

Which Option is Best for Your Business?

The choice between monthly and quarterly VAT returns depends on several factors, including your business’s cash flow, size, and administrative capacity. Here are some considerations to help you decide:

  • Cash Flow Needs: If your business often reclaims VAT, monthly returns can provide quicker refunds, aiding cash flow.
  • Administrative Resources: Consider the resources you have available for managing VAT returns. Monthly returns require more frequent attention.
  • Business Size and Complexity: Larger or more complex businesses might benefit from the detailed management that monthly returns offer, while smaller businesses might prefer the simplicity of quarterly returns.


Understanding the differences between monthly and quarterly VAT returns is crucial for effective VAT management. By considering your business’s specific needs and capabilities, you can choose the option that best supports your financial health and compliance with HMRC.

For seamless VAT management and expert advice, consider our InstantVAT service. We provide comprehensive support tailored to your business needs, ensuring timely refunds and accurate compliance. Contact us today to learn more about how we can assist with your VAT requirements.