In September 2021 HMRC announced a new system they are implementing to deal with anyone that submits their VAT or tax returns late.
This new approach is designed to harmonise processes across different types of tax payments and to incorporate Making Tax Digital.
It is anticipated that most people that are compliant most of the time are not treated in the same way as those that are less compliant most of the time.
Who will be affected by this change?
This system will apply to:
Which taxes are included?
This new system will be put into place to deal with late submission and payment for VAT returns as well as Income Tax Self-Assessment (ITSA).
When will this change be in operation?
Penalty Reform will replace existing penalties and will be implemented from:
What are the penalty charges?
The table below shows the approach and level of the penalty based on the number of days the payment is late.
Although it seems like there is a lot of time before this change is implemented, we suggest that you start to look at putting processes in place to ensure that your tax returns and VAT payments are made on time. If you would like any advice, please do contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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