- UK government updated guidance on VAT late payment penalties
- New system for late VAT payments and return submissions started January 1, 2023
- Replaced previous VAT default surcharge regime
- Late payment interest calculated from first overdue day
- First penalty issued if payment is 16 days overdue, calculated at 3% of owed VAT
- Additional penalties if payment is 31 days overdue
- Second penalty charged daily at 10% per year on outstanding balance
- Taxable persons can request a Time to Pay arrangement to avoid penalties
- Time to Pay requires adherence to a payment schedule
- New penalty system applies to all VAT-registered businesses
- Previous surcharge rules apply for periods before December 31, 2022
Source: vatabout.com
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.
