- Late payment penalties apply if VAT payments are overdue by more than 15 days
- New penalties replace the VAT default surcharge for late payments and submissions starting January 1, 2023
- Penalties do not apply to VAT payments on account or instalments under the VAT Annual Accounting Scheme
- Proposing a payment plan can reduce or eliminate penalties
- Late payment interest accrues from the first overdue day until full payment
- Contacting HMRC for a Time to Pay arrangement can help manage payments and reduce penalties
- A Time to Pay arrangement considers individual or business financial circumstances
- First late payment penalty applies if payment is 16 or more days overdue
- A second penalty applies if payment is 31 or more days overdue
- No penalties for payments overdue by up to 15 days
- First penalty is 2% of the VAT owed at day 15 for payments 16 to 30 days overdue
- For payments over 31 days overdue, the first penalty increases and a second penalty is charged
Source: gov.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
