Postponement to introduction of Penalty Reform for VAT
HMRC has announced a 9 month postponement of the introduction of the new penalties regime for late submission and late payment of VAT, to 1 January 2023. The delay will allow more time for HMRC to develop the required IT systems to manage the new regime.
When introduced, the application of late submission penalties will be determined using a penalty points system where points are awarded for each late submission and financial penalties are imposed where points exceed certain thresholds. This will be a substantial overhaul of the penalty regime for VAT and all businesses should prepare for its introduction and consider reviewing its VAT reporting and payment systems before it is introduced. This postponement will provide businesses with a little more time to get some comfort about their processes.
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