- Increased Late Payment Penalties: From April 1, 2025, late payment penalties for VAT and Making Tax Digital (MTD) Income Tax Self Assessment (ITSA) will rise, with penalties increasing from 2 to 3 percentage points at 15 and 30 days, and from 4 to 10 percentage points per annum from day 31.
- Penalty Reform Implementation: The changes are part of the penalty reform outlined in schedule 26 of the Finance Act 2021 and apply to taxpayers already under the new penalty regime, including VAT taxpayers and those in the MTD trial.
- Future Applicability: The increased penalties will also apply to any future tax regimes that fall under schedule 26, ensuring consistent enforcement of late payment penalties across various tax categories.
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