New VAT penalties for late returns.
A new points-based system for late VAT returns starts for return periods commencing on or after 1 January 2023. A £200 penalty will apply when a number of points have been accumulated, with the penalty threshold depending upon how frequently the returns are due. For a trader preparing quarterly returns a penalty will be charged when four points have been accumulated.
Significant changes to penalties for late payment of VAT liabilities are also being introduced from January, ending the former default surcharge regime. The new system will apply penalties of 2% after 15 days and again after 31 days. Thereafter a new 4% annual penalty will accrue, based upon the outstanding VAT.
For further information on VAT penalties, please contact Alan Rolfe on 023 8046 1235.