Submitting your VAT return or paying your VAT late can result in penalties and interest from HMRC.

1️⃣ Late VAT Return Submission 📄

HMRC operates a points-based penalty system for late VAT return submissions.

Each time you submit a VAT return after the deadline, you may receive a late submission penalty point.

Once you reach the penalty threshold for your filing frequency, HMRC will issue a £200 fixed penalty. Additional late submissions while you remain at the threshold can result in further £200 penalties.

💡 Good to know:
Penalty points expire after a period of compliant, on-time filing, provided you meet HMRC's requirements.

2️⃣ Late VAT Payments 💷

If you pay your VAT after the payment deadline, HMRC may charge late payment penalties.

The penalty depends on how late the payment is:

• ✅ Up to 15 days late: No late payment penalty, provided the VAT is paid in full (or a payment arrangement is agreed) within 15 days of the due date.
• ⚠️ 16–30 days late: A penalty may apply based on the VAT that remains unpaid after Day 15.
• 🚨 More than 30 days late: Additional penalties may apply based on the amount of VAT still outstanding.

3️⃣ Late Payment Interest 📈

HMRC also charges late payment interest on overdue VAT.

Interest begins to accrue from the day after the payment due date and continues until the outstanding VAT has been paid in full.

Late payment interest is charged in addition to any late payment penalties.

✅ Avoiding Penalties

To help avoid penalties and interest:

• Submit your VAT returns by the deadline.
• Pay any VAT due on time.
• If you're unable to pay in full, contact HMRC as soon as possible to discuss your options.

Need Help?

If you're concerned about a late VAT return or payment, the hellotax team can help you understand your obligations and guide you through the available options for correcting or resolving the issue.