HMRC warns incorrect AI advice is impacting VAT returns

HMRC has contacted professional bodies to warn businesses that some AI-generated information on VAT returns is incorrect, causing late submissions and delayed payments.

How has AI caused businesses to submit VAT returns incorrectly?

A growing number of businesses have submitted VAT returns after the due date when the 7^th of the month falls on a weekend or bank holiday.

The Chartered Institute of Taxation (CIOT) carried out their own research and found that some third-party websites and AI summaries wrongly suggest that VAT payments can be made after the deadline when it falls on a weekend or bank holiday. This is incorrect.

The correct VAT deadline

The deadline for the submission is one calendar month and 7 days after the end of the accounting period.

For example, a VAT return covering the period from 1^st January to 31^st March must be submitted to HMRC no later than 7^th May.

VAT returns must be submitted and payments must reach HMRC no later than the due date regardless of which day of the week this is.

No extensions for weekends or bank holidays

A key point many businesses are getting wrong:

• HMRC does not extend deadlines if the due date falls on a weekend or bank holiday
• Your return must still be submitted, and payment must reach HMRC, by that date

While you can submit VAT returns on weekends and bank holidays, if that’s not possible, you should plan to submit before the deadline. Ideally, it should be no later than the last working day prior to the due date.

Penalties still apply

HMRC does not consider the use of 3^rd party websites and AI to be a reasonable excuse for the late submission and payment of VAT returns and missed deadlines. This will incur interest and penalty points/penalties.

What you should do if you’ve been impacted

If your business submitted its VAT return late due to incorrect AI content, take these steps now and in the future:

• Review your VAT deadlines using official HMRC guidance. Only rely on the GOV.UK site for accurate deadlines and updates.
• Don’t rely solely on AI tools or summary websites ­­ — these systems pull content from external sources, and it’s not always clear how frequently they update their sites or how accurate they are.
• Allow time for payments to clear, especially around weekends and holidays.

AI can be a helpful tool, but only if it’s using accurate, up-to-date information as its source. Blind trust in these systems can be costly, which is why Shorts’ VAT team always recommends using official HMRC guidance when it comes to deadlines in accountancy.

If you're unsure whether your return complies with HMRC's guidance, Shorts offers a free VAT return review. If there are any areas of concern, our team will flag them with you to help you avoid potential action from HMRC.