Over 50% of British businesses filed their VAT returns late in 2020, according to a new report. According to the report, the rate of late VAT returns was 13% higher than the previous year. Failing to submit a valid VAT return on time puts companies at risk of penalties. The uptick in late filing underscores the urgent need for flexible and effective VAT compliance technology.
Penalties for late UK VAT payment
HMRC recently revised its system of penalties for late VAT payments.
In terms of the new system, companies will not incur a penalty if they pay the VAT owed within 15 days of the due date. A penalty kicks in if the company does not pay after 15 days. The taxpayer incurs a second, higher, penalty after 30 days of non-payment.
However, the liability for penalties does not end there. If VAT remains unpaid on day 31, HMRC applies an additional penalty that accrues daily at a rate of 4% per annum
Clearly, the ongoing accruing penalty can thus ultimately end up being extremely costly to the taxpayer. If the company does not settle the outstanding amount on time, or seek an arrangement with HMRC, very significant financial liabilities will accrue.
Don’t take chances with VAT compliance
As businesses struggle to meet their VAT compliance obligations on time, a simpler and more efficient VAT solution is clearly needed.
Vatglobal’s proprietary VAT compliance technology automates all your VAT filing and submissions. It’s a simpler, faster and more cost-effective way to ensure you are always 100% VAT compliant. Everywhere you have an obligation.
Vatglobal’s team of VAT specialists can also manage your VAT obligations for you. We’ll ensure you are registered for VAT wherever you have an obligation, and make certain you never miss a filing deadline. Plus, we’ll secure you VAT deferment and other advantageous mechanism, where appropriate.