New VAT penalty regime due to come in 1 April 2022 has been delayed

The new VAT penalty regime which was due to be introduced for VAT return periods beginning on or after 1 April 2022 has now been deferred to January 2023.

The regime was set to be amended to the following:

• A single penalty point issue for a late submission once the business has exceeded a points threshold for multiple missed returns. A flat penalty of £200 would be imposed for each late return.
• Late payment penalty for VAT liabilities will be in the form of a two-part penalty the first charge will be imposed at 2% of the outstanding tax if the tax due on the return remains unpaid 15 days after its due date. If any of the liability is still unpaid after 30 days the penalty increases to 4% of the liability outstanding at that point. The 4% charge is a daily penalty starting from 31 days after its due date until the business pays the liability in full.
• Late payment interest which is 2.5% will be payable from the due date until the date full payment is received by HMRC.

To avoid late penalties make sure you are aware of the key dates for VAT returns and payments please see the table below.

HMRC VAT liability payment details via fast payment CHAPS or bacs:

Reference being your 9-digit VAT registration number.

There is an extra few days for payment if you opt in to pay via direct debit giving you one less deadline to worry about.