Where you have failed to register your business for VAT on time, you will be charged a penalty, but the level of that penalty will vary depending on when you were first required to register. For VAT registrations due before 1 April 2010 the maximum penalty that can be imposed is 15% of the VAT due. Where VAT registration was first required after 31 March 2010 the penalty can be 100% of the VAT due. Although an unprompted disclosure within 12 months of the date when VAT registration was due can attract a nil penalty.  

Obligation to register for VAT before 1 April 2010

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_000120&propertyType=document

Obligation to register for VAT after 31 March 2010

http://www.hmrc.gov.uk/compliance/cc-fs11.pdf