VAT penalties: how the points system works

Late submission points

You receive a point for each late VAT Return, including a nil return. The threshold depends on the filing frequency: 5 points for monthly returns, 4 for quarterly returns and 2 for annual returns.

When the £200 penalty starts

Once you reach the threshold, HMRC charges a £200 penalty. Each later late return can create another £200 penalty while you remain at the threshold.

How points come off

You must meet the relevant compliance period and submit outstanding returns before the points expire. The period depends on how often you file, so check the current HMRC rules for your accounting period.

Late payment is separate

Late payment can create a percentage-based penalty and late-payment interest. Submit the return even if you cannot pay the full amount, then contact HMRC about payment options.

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