CH192070 - Penalty reform - penalties for failing to File VAT returns by the due date for periods from 1 January 2023: penalties for failing to submit VAT returns: overview

Late Submission Penalties

NB: “These rules currently only apply to VAT for VAT periods starting on or after 1 January 2023. These rules will come into force for other tax regimes at a future date. You must check the date from which these rules apply for the tax or duty you are dealing with”

The late submission penalty currently applies to VAT only although more taxes, for example Income Tax Self-Assessment (ITSA), will be added over time.

The returns which fall under the penalty regime are described by their ‘item’ number in a table in the legislation Schedule 24 to the Finance Act 2021, and the groups of returns are separated, by frequency, into ‘columns’ A, B and C to represent annual etc., quarterly etc. and monthly etc. See Part 1 para 2(1) Schedule 24 to the Finance Act 2021. VAT appears as item 4.

The legislation refers to the different groups of returns by their respective Item and column reference:

  • 4A- refers to VAT annual filing obligations
  • 4B- refers to VAT quarterly filing obligations
  • 4C- refers to VAT monthly filing obligations

The group for a return obligation determines the points maximum and the length of time for which VAT returns have to be submitted on time to reset points to zero- see CH192170

See table at CH192110 for more details on the relevant legislation.

If a taxable person has a non-standard tax period (NSTP) under Regulation 25(1)(c) VAT Regulations 1995, item 2 in each column of the table at CH192110 shows which filing obligation they fall under.

Note:

Non-standard tax periods are only included to the extent that they are of a length that a taxable person would usually (or will usually) submit returns of that length. Where a non-standard return period is only temporarily required (for example when a taxable person has changed stagger or filing frequency), this is not within the scope of the legislation.

Penalty points are not awarded for first period returns under Regulation 25 (1) (b) of the Value Added Tax Regulations 1995.

Penalty points are also not awarded for final returns under Regulation 25(4) of the Value Added Tax Regulations 1995.