The diffusion of vanadium ions across the membrane along with side reactions can have a significant impact on the capacity of the vanadium redox flow battery (VFB) over long-term charge–discharge cycling. Differential rates of diffusion of the vanadium ions from one half-cell into the other will facilitate self-discharge reactions, leading to an imbalance between the state-of-charge of the two half-cell electrolytes and a subsequent drop in capacity. Meanwhile side reactions as a result of evolution of hydrogen or air oxidation of V2+ can further affect the capacity of the VFB. In this paper, a dynamic model is developed based on mass balances for each of the four vanadium ions in the VFB electrolytes in conjunction with the Nernst Equation. This model can predict the capacity as a function of time and thus can be used to determine when periodic electrolyte remixing or rebalancing should take place to restore cell capacity. Furthermore, the dynamic model can be potentially incorporated in the control system of the VFB to achieve long term optimal operation. The performance of three different types of membranes is studied on the basis of the above model and the simulation results together with potential operational issues are analysed and discussed.