It's far preferable to have brought the bank reconciliation up to date before submitting a VAT return because the bank account is almost always pretty much the pivot around which everything else operates in terms of a business's accounts. However, being preferable isn't the same as being vital - when push comes to shove, you have to do what you can with what you have.

The VAT function in Sage is fairly straightforward:

Go to the 'Company' screen, and click "Manage VAT" in the tasks pain (top left). Click on VAT return, and near the top right of that screen enter the start and end dates for the VAT return. Make sure the tick box at the bottom (labelled "Include Reconciled") is unticked, and click "Calculate".

After a few moments, while Sage checks its database to see what needs to be included, you'll get a dialogue that says something like "1024 transactions found for this VAT return. 128 of these are unreconciled from a previous period. Do you want to include them?" Normally here you'd click "Yes" - these are usually transactions dated in the previous quarter which, for whatever reason, have been entered late - after that return has been completed. The results are then filled in - at this stage you can check the figures to see if they look right, or if something looks wrong and needs to be investigated.

Print the return out, note the figures down, whatever, and click "Close". Sage will ask you if you want to reconcile the figures or not - at this stage, say no; don't reconcile.

If there were any oddities to investigate, you do so at this stage - posting any corrections, or whatever. Then you go in and run the return again. If the figures look right, fine - if not, close without reconciling again, wash, rinse, repeat.

I usually advise taking a backup once you are satisfied the figures are correct, this being a "permanent" backup, as opposed to the more transient daily backups, so that the VAT return can be recreated exactly if necessary in future by restoring that backup. With that out of the way, go into the VAT return screen again, and this time when you click "Close" you can tell it to reconcile things, and the return will appear in the list.

You can then submit the return - which these days you can do from within Sage; highlight the return and right click on it. From the menu click "Submit return". If you have it set up correctly in Sage, it will connect to HMRC and pass them the figures. If not, you'll either have to set it up, or submit the return manually by logging onto the HMRC site.

You can also then tell Sage to perform the VAT transfer, which takes the outputs VAT from this return from the outputs code, and the inputs figure from the inputs code, and posts those figures into the VAT liability code; the difference, that ends up in that nominal account, is the amount due to be paid to (or reclaimed from) HMRC. This is done from the "VAT tasks" entry on the same menu as above. And when payment is made, you can do that from the same place.

That's the normal method, anyway - I'm not sure what you'd have to do given what you say about the last quarter, having never been in that situation. I'd imagine you need to run a VAT return for the six months, and deduct what was estimated that time, but you might want to verify that.

Yes, those transactions will be included next time - that's the purpose of the "reconcile" function, and the option to include unreconciled transactions from the previous quarter(s);

When you decide a VAT return is ready and reconcile it, Sage fills in a couple of fields for all the transactions it has included which tells it for future reference that the transactions have been used on a VAT return (and which one). Therefore, when you are doing the next quarter's VAT, it can look at all the transactions and spot any dated before this return that haven't been included on the previous one(s) - and offers to include them this time (the "there are xyz unreconciled transactions..." message).

You won't be penalised for late transactions - they are a common thing, and (IME) are usually small anyway. HMRC won't usually know about them anyway because, when you submit a return, they only see the totals for each VAT box, not the underlying data. (Though they'll expect to be able to see that if they ever do a VAT inspection).

HMRC have an error threshold for VAT returns, whereby if you find errors on previous returns, then if the total (the net of the input and output VAT) is below the threshold you can just include them on the next return - and that covers typical late transactions. If the value of transactions that haven't gone into the accounts in previous returns exceeds the threshold, I'd class it as an error rather than a simple late transaction, because that would be a significant amount to miss off of a return. Small amounts, maybe - but not enough to exceed the threshold.