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VAT Returns

HMRC have changed the way penalties are calculated for late filing and/or payment of VAT returns. This includes nil and repayment claims.

Late Submission

Under the new regime late submission penalties will work on a points-based system. For each return you submit late, you will receive a penalty point until you reach the penalty point threshold. When you reach the threshold, you’ll receive a £200 penalty. You’ll also receive a further £200 penalty for each subsequent late submission while you’re at the threshold.


Most companies or sole traders etc, submitting quarterly thresholds have a penalty points threshold of 4 points. If 4 consecutive returns are submitted late then there is a fine of £200. Points incurred will expire 25 months after the date the penalty was incurred; this effectively means you cannot submit more than 3 returns late in a 24-month period without incurring a fine.

Late Payment

From the first day your payment is overdue, until you pay in full, HMRC will charge late payment interest.

You’ll get a first late payment penalty if your payment is 16 or more days overdue.

When your payment is 31 or more days overdue, your first late payment penalty increases, and you get a second late payment penalty.

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Get in touch with us

If you are struggling to meet VAT payments you should contact us or HMRC as soon as you realise you can not pay; this will normally result in a reduction in the penalties.

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