New penalty system for late VAT payments

Key points

• A new penalty system will apply to VAT periods beginning on or after 1 January 2023.
• The new regime gives a 15-day period of grace before a penalty is charged.
• Late payment interest will still be charged on the basis of commercial restitution.
• The aim of the new system is to penalise persistent offenders.

A fairer system fewer draconian penalties for minor offences less time wasted at tribunals arguing about what is classed as a reasonable excuse and bigger penalties for persistent rather than occasional offenders. Heady days.

The above summary is not an over-exaggerated extract from a party political broadcast about crime – lots of promises and pleasing words – but my view of the new penalty system for late VAT payments that will take effect for VAT periods beginning on or after 1 January 2023. Get ready for the big day I think...