Penalties ― late payment of VAT

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note sets out how the penalty regime for the late payment of VAT applies for VAT accounting periods commencing on or after 1 January 2023.

For separate penalties associated with the late submission of VAT returns, see the Penalties ― late submission and failure to submit returns guidance note.

These two penalty regimes replace the default surcharge regime.

See also De Voil Indirect Tax Service V5.383.

Penalties for late payment of VAT ― the basics

Under the penalty regime for late payment of VAT no penalty should be charged if within 15 days a business either pays the VAT it owes in full or agrees a time to pay arrangement with HMRC.

A first penalty is calculated at 2% of the VAT owed at day 15 when payment is made (or a payment plan agreed) on or between days 16 and 30 after the due date.

If a payment is 31 days or more overdue then:

•
a first penalty will be calculated at 2% of the VAT owed at day 15

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Corporation Tax

Real estate investment trusts (REITs)

Real estate investment trusts (REITs)Introduction to REITsA real estate investment trust (REIT) is in fact not a trust at all, it is a company which qualifies for special tax treatment under CTA 2010, Part 12. REITs are similar in many ways to collective fund vehicles (such as unit trusts) in that

14 Jul 2020 13:04 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

Employment Tax

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

14 Jul 2020 11:13 | Produced by Tolley in association with Jim Yuill at The Yuill Consultancy Read more

Brexit

UU��ֱ��