VAT penalties for late returns and/or late payment; late registration
Return and payment must both be on time see Paying VAT online.
Late returns or payments result in moving up the scale while on-time returns and payments result in moving down.
Late returns result in a form VAT151 Notice of Assessment of Tax; an estimated assessment based on your normal sales but without allowing for any costs. Paying the assessment is not a substitute for filing and paying the return. When you file the return the estimate will be amended and penalties will be assessed on the following scale:
Times late:
1. warning.
2. 2% of VAT payable
3. 5% of VAT payable
4. 10% of VAT payable
5. 15% of VAT payable
Late payment penalties are avoided if you reach agreement under the Business Payment Support Service in advance of the due date.
If there is no VAT payable there is no penalty but the late return will register for Times late in the totting-up scale of percentages which will be applied to subsequent returns which may be filed late. HMRC will continue to pursue estimated assessments and penalties until the return is filed.
An accumulation of penalties will be levied if you fail to apply for VAT registration at the compulsory date.
See tax treatment See Penalties on this page index