What and when will be The New Penalty Regime for Vat Returns
16/05/2022

The New Penalty Regime for Vat returns – periods starting on or after 1/1/23


Changes will affect everyone submitting VAT Returns for accounting periods starting on or after 1 January 2023. Importantly, the default surcharge will be replaced by new penalties if you submit VAT returns late or pay VAT late.
The new VAT penalty regime was due to be introduced for VAT return periods beginning on or after 1 April 2022, 
There will also be changes to how VAT Interest is calculated.


What happens If you submit your VAT return late?
Late submission penalties will work on a points-based system.
For each VAT Return you submit late you will receive one late submission penalty point.
Once a penalty threshold is reached, you will receive a £200 penalty and a further £200 penalty for each subsequent late submission.
The late submission penalty points threshold will vary according to your submission frequency.
Submission frequency    Penalty points threshold    Period of compliance


Annually    2    24 months
Quarterly   4    12 months
Monthly     5      6 months


You will be able to reset your points back to zero if you:
•    submit your returns on or before the due date for your period of compliance — this will be based on your submission frequency
•    make sure all outstanding returns due for the previous 24 months have been received by HMRC

If you do not pay your VAT on time
For late payment penalties, the sooner you pay the lower the penalty rate will be.
Up to 15 days overdue
You will not be charged a penalty if you pay the VAT you owe in full or agree a payment plan on or between days 1 and 15.
Between 16 and 30 days overdue
You will receive a first penalty calculated at 2% on the VAT you owe at day 15 if you pay in full or agree a payment plan on or between days 16 and 30.
31 days or more overdue
You will receive a first penalty calculated at 2% on the VAT you owe at day 15 plus 2% on the VAT you owe at day 30.
You will receive a second penalty calculated at a daily rate of 4% per year for the duration of the outstanding balance. This is calculated when the outstanding balance is paid in full or a payment plan is agreed.

Please contact Lipson and Co for more information.  Click here 


Contact Us

Lipson & Co
88 North Street
Hornchurch
Essex
RM11 1SR
 
01708 300410

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www.lipsonandco.com

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