From 1 January 2023, penalty points apply for late submission of VAT returns. If your accounting period starts on or after 1 January 2023, this is relevant to you.
Key points
- Submit returns on time: Each late return adds a penalty point until a threshold is reached.
- Threshold depends on VAT return frequency: Quarterly (4), monthly (5), annually (2).
- Penalty: A £200 penalty applies once you reach the threshold.
- Further penalties: Subsequent late returns can trigger additional £200 penalties.
- Exemptions: First and final VAT returns may be excluded. Other “one-off” returns of a different accounting period may also be excluded.
- Appeals: Appeals are difficult and must meet HMRC conditions. A “reasonable excuse” is typically required for HMRC to consider an appeal.
