Late submission penalties now work on a points system. For each VAT return that is submitted late, HMRC will issue you with 1 penalty point, once you hit the threshold, you receive a penalty charge.
Depending on VAT period, your penalty point thresholds are as follows:
Accounting Period Penalty Points Threshold
Annually – 2 points
Quarterly – 4 points
Monthly – 5 points
You will receive 1 penalty point each time a submission is late, and points expire after 24 months. Once you hit the threshold HMRC will automatically give you a £200 penalty.
Please be aware that penalty points will be issued as a result of late submission to nil VAT returns and VAT reclaim returns.
VAT returns that are not affected by the above are:
- First VAT return, if newly registered
- Final VAT return, after you cancel VAT registration
- One-off VAT returns that cover a period other than a month, quarter or year (e.g. if you’ve changed from quarterly to annually and have a 4-month period to file).