In the previous blog post, we talked about penalties for late filing and payment of self-assessment tax. And, this time, we have a post about VAT surcharges and penalties in case of late filing and payments.

If you are VAT registered businesses in the UK, you need to file and pay your VAT before the deadlines. That’s because the surcharges and penalties you can face on the late filing and payments are becoming stricter than ever.

When you fail to file a return before the deadline, HM Revenue & Customs will examine the Value Added Tax you owe. In case if you are late than once for paying the tax, you are required to a pay a default surcharge. These default surcharges and consequences of doing default again are explained by the HMRC.

Terms:
Default- A late VAT return or payment
Surcharges- Percentage of tax paid late

Default within 12 months Surcharges if turnover is less than £150,000
1 None
2 None
3 3% ( none if it is less than £400)
4 5% ( none if it is less than £400)
5 10% or £30 ( whichever is more)
6 or more 15% or £30 ( whichever is more)

Default within 12 months Surcharges if turnover is £150,000 or more
1 None
2 2% ( none if it is less than £400)
3 5% ( none if it is less than £400)
4 10% or £30 ( whichever is more)
5 15% or £30 ( whichever is more)
6 or more 15% or £30 ( whichever is more)

Under-declaring or over claiming the amount of your Value Added Tax due to carelessness or deliberate inaccuracy will also make you face penalties of up to 100%. So, you need to be very careful not do this mistake.

If HMRC sends you a low assessment and do not inform them it is wrong within 30 days, you will charged with 30% of assessment. Moreover, you can be charged with £400 if you submit a paper VAT Return unless HMRC has freed you from submitting.