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Late filing and payment See VM ¶4047 From a date to be announced, it is proposed that the following regimes be introduced to discourage late filing of VAT returns and late payment of VAT due. Late filing Where returns are supposed to be submitted quarterly: » a £100 penalty as soon as a return is late (whether or not the tax has been paid) — this starts a one-year penalty period, extended for each subsequent late submission; » for each further failure within the penalty period the fixed penalty increases by £100, to a maximum of £400; » an additional 5% of the tax on the relevant return if it has not been filed after 6 and 12 months; and » if, by failing to make the return, the taxpayer is deliberately withholding information to prevent HMRC from correctly assessing the VAT liability, a penalty of up to 100% of the tax. Where returns are supposed to be submitted monthly: » as above, except that the fixed penalties are £100 for the first six failures in any penalty period, then £200 for any subsequent failures. Late payment Where payment is supposed to be made quarterly: » no penalty for the first late payment, although a one-year penalty period starts; » the second failure within the year will lead to a 2% penalty and extend the penalty period to the first anniversary of the second failure; » the third failure within the extended penalty period will lead to a 3% penalty and a further penalty period extension; and » further failures will attracting a maximum penalty of 4%, although additional penalties of 5% of the unpaid tax will be charged at 6 and 12 months from the date of the failure. Where payment is supposed to be made monthly: » as above, except that, after the first failure, the penalties are 1% for the next three failures in the penalty period, 2% for the next three failures, 3% for the next three failures and 4% thereafter. Change of return period Special rules will deal with any change from monthly to quarterly returns, or vice versa, and with any exceptional payment obligations which may arise. |
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