The Ellacotts VAT team looks at the way in which HMRC charges penalties for late VAT return submissions and late VAT payments. All VAT return periods starting on or after 1 January 2023 will be caught under the current VAT penalty regime.

There are now separate penalties for late submission of a VAT return and late payment of VAT to HMRC. The previous surcharge-based scheme applied to both late submissions and late payments of VAT. This has been replaced by a points-based system for late returns.