Making Tax Digital - penalties
With the 1 April 2019 launch of the UK’s Making Tax Digital (MTD) initiative for VAT recording and filing, HMRC has taken the opportunity to update the VAT penalty regime to bring it into line with income and corporation taxes.
The new regime will be as follows:
Penalties for late VAT MTD submissions
The UK is introducing a penalty points system from 1 April 2020. The will be as follows:
- One penalty point for a missed VAT return
- A fine after four accumulated points for a missed quarterly VAT return
- A fine after four accumulated points for a missed monthly VAT return
Accumulated points expire two years after they are imposed.
Interest charges for late VAT MTD payments
In addition to penalties for late submission, there will also be interest charges.
|Late by 15 days||No penalty|
|Late payment between 15 days and 30 days||50% of HMRC interest rate charge|
|Late after 30 days||100% of HMRC interest rate charge, plus daily interest charge|
Latest British news
February 4, 2019
HMRC has won a tax tribunal ruling which held that the sandwich shop chain, EAT Limited, had to charge 20% VAT on its bacon breakfast muffins and grilled ciabatta bread products. EAT is now obliged to settle a £632,620 VAT bill for failing to levy VAT on these products.
January 25, 2019
The European Commission (EC) has proposed switching from unanimous to majority voting on EU VAT and other tax policies. The aim is to progress fiscal reforms which face immovable opposition from just a limited number of member states.
January 24, 2019
HMRC has extended the Making Tax Digital for VAT pilot to members of VAT Groups. MTD will require over 1 million businesses above the £85,000 VAT registration threshold to record
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