Isle of Man Increases VAT Late Payment Penalties and Extends Final Return Deadline

• Minor legislative changes to VAT Act and Regulations are now in effect
• Changes include increased late payment penalties and extended final VAT return deadline
• Aligns Isle of Man VAT rules with those of the United Kingdom
• New late payment penalties effective from 31 July 2025 for periods starting on or after 1 June 2025
• Penalty of 3 percent applies if VAT is unpaid within 15 days of due date
• Additional 3 percent penalty if VAT remains unpaid at 30 days
• Unpaid VAT after 30 days incurs a 10 percent penalty
• Extended deadline for final VAT returns from 1 July 2025 for businesses de-registering for VAT
• Treasury can extend deadlines due to processing delays or compliance issues
• Taxpayers can request a Time to Pay plan to pay VAT in instalments
• Penalties may be avoided or reduced with a Time to Pay arrangement
• Taxpayers have a right of appeal and may avoid penalties with a reasonable excuse

Source: gov.im

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.

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