HM Revenue and Customs (HMRC) is reminding VAT registered businesses to file their returns and pay on time following the introduction of a new penalties system.
The late payment penalties and points-based late submission penalties were introduced from 1 January 2023, replacing the VAT default surcharge. The first monthly returns and payments affected by the penalties are due by 7 March 2023.
The new penalties system has been designed to be fairer and more proportionate for businesses which submit late VAT returns, or pay their VAT late. Changes have also been made to how interest is calculated.
Paul Riley, Director of Tax Administration, HMRC, said:
“Our aim is to help customers get things right before monetary penalties are applied; a points-based system for late VAT returns will not punish the occasional error.
“We are contacting 2.5 million VAT registered businesses about the changes and will continue to support customers to help them manage their tax affairs and payments.”
HMRC is also reminding businesses to be mindful of scams as they adjust to the changes. Businesses should never share their HMRC login details. Someone using them could steal from the business or make a fraudulent claim in their name. Individuals should never give out personal information if they are unsure of who is contacting them. For more information, go to GOV.UK and search for ‘phishing and scams’.
Further details on the changes to VAT penalties can be found online on the government website.
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