VAT penalties: the new rules

As part of the replacement of the ‘default surcharge’ regime a new points-based penalty regime applies when a business fails to submit a VAT return or submits a return late with effect for VAT return periods that start on or after 1 January 2023. There is also a new penalty regime for the late payment of VAT applies for VAT accounting periods commencing on or after 1 January 2023. Key points for the new late submission and failure to submit returns regime include: there are different penalty thresholds depending on whether the business submits its returns monthly quarterly or annually; penalty points generally expire after a two-year period has elapsed; penalty points should not be issued; and complexity can arise where a business changes the frequency of its VAT submissions and an adjustment to the number of penalty points held may be required. Under the new late...