How to remove penalty points under the new system
Following our article on the new penalty for late submission of VAT returns, this article covers removing late submission penalty points. This relates to late submissions of returns for periods commencing on or after 1 January 2023.
To recap, each late return submission will incur one penalty point. The penalty thresholds for the different VAT return periods are below and when this threshold has been reached each late submission will incur a £200 penalty.
- annual returns – 2 points
- quarterly returns – 4 points
- monthly returns – 5 points
To reset the points threshold to nil, all returns must be submitted for the previous 24 months and all returns must be submitted and paid on time for the following periods:
Annual returns – 24 months
Quarterly returns – 12 months
Monthly returns – 6 months
To summarise, for normal quarterly returns, 4 late returns will incur a £200 penalty and every subsequent late return will incur a further £200 penalty until 4 consecutive returns have been submitted and paid on time and the previous 8 returns have all been submitted.