Penalties, Compliance & HMRC
Staying on the right side of HMRC: the penalty points system, late-payment penalties, and what happens in a VAT check.
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Penalties, Compliance & HMRC
Staying on the right side of HMRC: the penalty points system, late-payment penalties, and what happens in a VAT check.
How does the new VAT penalty points system work?
HMRC's points-based penalty system changed how late returns and payments are penalised. Here is how the points and the late-payment charges actually work.
What is the penalty if I pay my VAT late?
If your VAT payment is over 15 days late, HMRC charges 3% at day 15, 3% at day 30, then 10% a year from day 31. Time to Pay before day 15 stops the clock.
What counts as a 'reasonable excuse' for a late VAT return?
A reasonable excuse is something beyond your control that stopped you filing on time despite reasonable care. Here is how HMRC and the tribunal decide.
Can I appeal a VAT penalty?
Every VAT penalty carries a right of appeal. You have 30 days to request a free internal review or go straight to the First-tier Tribunal.
What happens during an HMRC VAT inspection?
An HMRC VAT inspection is a compliance check on your VAT records and business activity. Here is the full process, from the first letter to the visit itself.
How far back can HMRC investigate my VAT?
HMRC can generally assess VAT up to four years after the period with the error, or up to twenty years where the behaviour was deliberate.
How can I dispute / appeal a VAT decision from HMRC?
You have 30 days from the decision letter to accept HMRC's offer of a free internal review or appeal to the First-tier Tribunal.