Managing VAT can be complex, even for well-organised businesses. With changing thresholds, Making Tax Digital (MTD) rules, and stricter HMRC reviews, it’s easy for errors to slip through unnoticed. Unfortunately, those small mistakes can lead to penalties, interest charges, or even compliance investigations. Here, we explore the most common VAT mistakes business owners make and how to avoid them. 1. Missing VAT deadlines One of the most common causes of penalties is late filing or payment.