What is the penalty for late filing of monthly VAT return? | New penalty regime for late submission and payment of VAT

When did the late VAT return penalties system change?
The VAT penalty regime that applies to the late submission and / or late payments of VAT returns changed for VAT return periods beginning on or after 1 January 2023. Under the new regime, there are separate penalties for late VAT returns and late submissions. Penalties for late submission apply even if there is no VAT liability or there is a repayment due.

What are the new changes for late VAT return penalties?
The system is points-based. This means that taxpayers will incur a penalty point for each late submission. At a certain threshold of points, a financial penalty of £200 will be charged and the taxpayer will be notified. The threshold varies depending on the required submission frequency (monthly, quarterly, annual).
Points for penalties
A penalty will be charged when your total meets these thresholds:

 
For quarterly VAT returns, the penalty points threshold will be 4 points. The penalty points will reset to zero following a period of compliance, for quarterly returns this requires 12 months of compliance. There are time limits after which a point cannot be levied. 

 
Are there any additional late payment penalties
There are also late payment penalties. A first payment penalty of 2% of the unpaid tax that remains outstanding 16-30 days after the due date. The second payment penalty increases to 4% of any unpaid tax that is 31 or more days overdue.

Late payment interest will be charged from the date a payment is overdue until the date it is paid in full. Late payment interest is calculated as the Bank of England base rate plus 2.5%.
 
Contact us
At Moore (South), our specialist tax team assists you to try to ensure submissions are made on time and you pay any amounts by the due date.