What are the VAT Late Filing Penalties?

VAT returns are made quarterly in the majority of cases, but there are monthly and annual schemes.

You must file your VAT return online by the end of the month plus 7 calendar days before the period ends. For example for a quarter that ended in May, you must file your VAT return by the 7th of July.

If paying by cheque you must pay by the VAT return due date but if paying electronically you can also pay any VAT due by the 7th. Again, HMRC does not accept Faster Payments so you must ensure funds clear by then. Furthermore, if paying by direct debit HMRC will collect payment a further 3 working days after the 7th.

 

Different rules are depending on your turnover. The table below summarises the rules for surcharges where deadlines are not met:

Default Turnover below £150,000 Turnover above £150,000
First No surcharge No surcharge
Second No surcharge 2% of unpaid VAT(unless below £400)
Third 2% of unpaid VAT(unless below £400) 5% of unpaid VAT (unless below £400)
Fourth 5% of unpaid VAT (unless below £400) 10% of unpaid VAT
Fifth 10% or £30 (whichever is more) 15% or £30 (whichever is more)
Sixth and subsequent 15% or £30 (whichever is more) 15% or £30 (whichever is more)

If you are late with a payment or filing a return, HMRC will initiate a 12-month probation period known as a ‘Surcharge Period’ during which any successive failures will incur the next level of fine as well as resetting the Surcharge Period for another 12 months. The Surcharge Period will come to an end when 12 months of consecutive returns are filed and paid on time.

Surcharges apply if you miss a return or a payment, so even if you pay on time but don’t file the return the surcharges still apply in the same way and vice versa.

Are you looking for professional tech-savvy tax advisors and accountants in the UK to guide you? Contact us now!

 

For more information, get in touch with Accotax Accountants in UK.

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