2023 VAT Point System

2023 VAT Point System

Late Submission Penalties

For VAT periods starling on or after 1 January 2023, the default surcharge will be replaced by new penalties if you submit VAT returns late or pay VAT late.

There will also be changes to how VAT interest is calculated.

Who is affected?

The changed will affect everyone submitting VAT returns for accounting periods starting on or after 1 January 2023. Any nil or repayment VAT returns received late will also be subject to late submission penalty points and financial penalties.

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 you will receive a first penalty calculated at 2% on the VAT you owe. 31 days overdue you will receive the 16-30 days penalty plus and addition 2% on the VAT you owe at day 30.