Changes to VAT penalty regime

Historically, if you were late in filing your VAT return or in making payment to HMRC more than once in a 12-month period then HMRC would apply a surcharge on the associated liability however, if there was no liability then there was no surcharge (although defaults could impact the level of surcharges on future returns, up to 15%).

For VAT periods starting on or after 1 January 2023, HMRC has abolished the old surcharges and changed the way penalties are applied to late returns and replaced them with a penalty points system.

VAT filing/payment deadlines

The deadline for filing your VAT return and making any payment to HMRC has not changed. This will always be 1 month + 7 days after the end of the VAT return, i.e. a VAT return ending 31 March will have a deadline of 7 May.

Quarter Month Ended Filing Deadline Payment Deadline
31 Jan 23 07 Mar 23 07 Mar 23
28 Feb 23 07 Apr 23 07 Apr 23
31 Mar 23 07 May 23 07 May 23
30 Apr 23 07 Jun 23 07 Jun 23
31 May 23 07 Jul 23 07 Jul 23
30 Jun 23 07 Aug 23 07 Aug 23
31 Jul 23 07 Sep 23 07 Sep 23
31 Aug 23 07 Oct 23 07 Oct 23
30 Sep 23 07 Nov 23 07 Nov 23
31 Oct 23 07 Dec 23 07 Dec 23
30 Nov 23 07 Jan 24 07 Jan 24
31 Dec 23 07 Feb 24 07 Feb 24

Late filing of a return

For each return you submit late, you will receive a penalty point.

Once you’ve reached your penalty point threshold, you’ll receive a £200 penalty and a further £200 penalty for each subsequent late submission while you’re at the threshold.

What is my threshold?

The threshold period is set by your accounting period and the points threshold depends on the frequency of your VAT submissions.

Accounting period Penalty points threshold Period of compliance
Annually 2 24 months
Quarterly 4 12 months
Monthly 5

6 months

Late payment charges

HMRC has now separated the interest and penalty charges in an effort to simplify things.


If you pay your VAT liability late HMRC will charge interest at 2.5% over the Bank of England base rate from the first day your payment is overdue until the day it’s paid in full.

If your payment becomes overdue by 16 days or more HMRC will impose a first late payment penalty.
When your payment is 31 or more days overdue, you get a larger first late payment penalty and a second late payment penalty.

First late payment penalty Second late payment penalty
Payment up to 15 days overdue None None
Payment between 16 and 30 days overdue Calculated at 2% on the VAT you owe at day 15. None
Payment 31 days or more overdue Calculated at 2% of what was outstanding at day 15 plus 2% of what is still outstanding at day 30

Calculated at a daily rate of 4% per year on the outstanding balance charged every day from day 31 until the outstanding balance is paid in full

For full details on the changes to the VAT penalty regime please see the following links:

Late filing of a return

Late payment of your VAT liability


This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated to us.

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