- Implementation of Late Payment Interest: As of January 1, 2023, HMRC began charging late payment interest on overdue VAT payments, calculated from the first day a payment is late until it is paid in full, at a rate of the Bank of England base rate plus 4%.
- Penalties for Late Payments: If a VAT payment is more than 15 days overdue, businesses will incur a late payment penalty in addition to interest charges, with penalties decreasing the sooner the payment is made. This system replaces the previous VAT default surcharge.
- Support and Objection Procedures: Businesses are encouraged to contact HMRC if they are unable to pay on time. While late payment interest charges cannot be appealed, objections can be raised if there are errors or unreasonable delays caused by HMRC, provided the tax has been fully paid.
Source gov.uk
