Blog Search

Archives

Late VAT payments and interest

The new penalty regime for late payment of VAT is fairer to those who miss the VAT payment deadline by a few days.

For Vat due in relation to periods beginning on and after 1 January 2023 you will have up to 15 days to pay, or arrange a time to pay agreement, without incurring a penalty. For the first year of this new system, you will have 30 days to pay the VAT liability in full instead of 15 days.

From 2024 onwards the new late payment penalties will be applied in two parts:

First penalty:

– 2% of the VAT unpaid at day 15; and
– a further 2% of the VAT unpaid at day 30.

If the payment is made after day 30 the first penalty will be 4% of the amount due. However, if full payment is made between days 15 and 30, this first penalty will be set at 2%.

Second penalty

From day 31 the penalty is charged daily, based on an annual rate of 4% of any outstanding amount.

Interest

The rate of interest applied for late payments of VAT will be the Bank of England base rate plus 2.5%. Interest will be paid on repayments at the Bank of England base rate minus 1%, subject to a minimum rate of 0.5%.

There is no carry forward of default periods or surcharge levels from the old VAT penalty system into the new late filing or late payment penalty regimes.

  • Latest news and testimonials

  • Latest News

    • September Q&A

      Q. I have two small businesses which are treated as a group for VAT purposes, so we only submit a single VAT return covering both …

      Read more
    • Making Tax Digital for Business: update

      In July, the Government confirmed that the Summer Finance Bill would be published in September, with the measures dropped from the pre-election Finance Bill being reintroduced …

      Read more
  • Testimonials

    • Partner – Solicitor

      I have worked with SBL over the last 10 years on numerous matters involving owner-managed business. They are professional, personable, knowledgeable and work incredibly hard to provide the best advice to their clients. I would have no hesitation in recommending SBL.

  • Don’t hesitate to ask

    SBL are here to help. With accountancy advice and tax planning experts on hand to guide you and your business on the pathway to success! You can call us on 020 7580 6822, or email us on info@sblaccoutants.com or if you’d prefer you can complete our Free Online Enquiry Form and one of the team will be in touch shortly.

    Don’t hesitate to ask

    Don’t hesitate to ask section
    • This field is for validation purposes and should be left unchanged.

    By submitting my details on this form, I consent to being contacted by a member of the SBL Accountants team by email or telephone. Privacy Policy