UK introduces a new penalty regime as of 1 January 2023
The new penalty regime works as a points-based system and applies to VAT accounting periods starting on or after 1 January 2023 only. This means that any VAT periods prior to 2023 will be subject to the previous penalty regime.
Under the new regime, late submission will trigger penalty points up to a set threshold.
When a taxpayer reaches the threshold, a GBP 200 penalty will apply. Additionally, an extra GBP 200 penalty will then apply to each subsequent late return.
This new points-based penalty regime aims to be more indulgent with taxpayers who miss a deadline occasionally whilst being stricter with VAT payers who repeatedly fail to submit their VAT return on time.