3rd November 2022
On 31st October 2022 HMRC announced new penalties for late payment of VAT which will be brought on or after the New year.
These new changes include two late payment penalties; the first penalty and second penalty. These will replace the default surcharge rules starting after the 1 January 2023.
First penalty
- 2% of the VAT unpaid at day 15
- A further 2% of the VAT unpaid at day 30.
In other words, payments made after 30 days will be subject to the 4% first penalty and if a full payment is made between days 15-30, the first penalty charge will be 2%.
Second penalty
There will be a daily charge for any payments made after day 31 and will charged at the annual rate of 4% of any outstanding amount.
No late payment penalties will arise if the VAT is paid within 15 days of the due date, however late payment interest will still be incurred.
Should you have difficulties in paying any outstanding VAT amount, HMRC offer a Time To Pay (TTP) arrangement. Please contact us to find out more.