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From 1 June 2025, Isle of Man increases late VAT payment penalties: 3% after 15 days, additional 3% after 30 days, and a 10% penalty for unpaid VAT beyond 30 days.
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These changes align with the UK’s updated penalty rates, effective from 1 April 2025, under the Customs and Excise Agreement 1979 to harmonize VAT rules between jurisdictions.
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From 1 July 2025, the Treasury may extend final VAT return deadlines for businesses deregistering VAT, helping avoid unfair penalties caused by processing delays or compliance issues.
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Taxpayers facing financial difficulties can apply for Time to Pay arrangements, potentially reducing or avoiding penalties, with rights to appeal if a reasonable excuse for late payment exists.
Source: Orbitax
