- New Penalty Structure: As of January 1, 2023, the UK has replaced the VAT default surcharge with a new late payment penalty system, imposing penalties for late VAT payments starting from the first day overdue. A first penalty applies after 15 days, with escalating fees for payments overdue by 31 days or more.
- Payment and Compliance Options: Businesses facing difficulties in meeting VAT payment deadlines can contact HMRC to arrange a “Time to Pay” plan, which may reduce penalties. Compliance with these new regulations requires careful monitoring of payment deadlines and potential penalties based on the timing of payments.
- Consequences of Non-Compliance: Failure to adhere to the new penalty structure can result in significant financial consequences for businesses, including increased penalties based on the duration of the delay. Companies are urged to familiarize themselves with the new rules and maintain accurate records to avoid hefty fines.
Source gov.uk
