New VAT penalty system applies to late March returns

HMRC has issued a reminder that the new penalties will apply to VAT return periods which start on or after 1 January 2023 which for businesses filing on a monthly basis will start affecting returns due on and after 7 March 2023.

The deadline for submitting VAT returns online and for paying any VAT due is one calendar month plus seven days after the end of an accounting period. So where a monthly VAT period started on 1 January 2023 - when the new regime came into effect - a business’s first return under the new regime will be due on 7 March.

For quarterly VAT periods the new penalties and interest regime will first apply to returns due by 7 May 2023.

HMRC also reminds businesses that late-payment interest will start to run from the day after any VAT is due until the day it...