CH192170 - Penalty reform - penalties for failing to file VAT returns by the due date for periods from 1 January 2023: award of penalty points: overview
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”
If a taxable person fails to submit a VAT return by its due date, the taxable person is liable to one penalty point.
If HMRC awards a penalty point, they must notify the person of the penalty point and to which return it relates.
A taxable person is not liable to a penalty point if that person already has the maximum number of penalty points- see table below. Any further late submission of a VAT return will render the taxable person liable to a financial penalty – see CH192260.
| VAT submission frequency | Penalty point maximum |
|---|---|
| Annual | 2 |
| Quarterly | 4 |
| Monthly | 5 |
If a taxable person has more than one VAT submission failure in a calendar month, they will not be liable to more than one penalty point for all VAT submission failures in that month. This would rarely arise in VAT but may be possible in limited circumstances when Non-Standard Tax Periods are used.
VAT Non-standard tax periods (NSTP)
| Length of Non-standard Tax Period | Penalty points maximum |
|---|---|
| Over 20 weeks | 2 |
| Over 8 and up to and including 20 weeks | 4 |
| Up to and including 8 weeks | 5 |
A taxable person has a penalty point if HMRC:
- has awarded that person the penalty point.
- and the penalty point or liability to it has not been cancelled.
- or the penalty point has not expired.
FA2021 SCH24 para 5(2) and (9)