A new, and arguably fairer, system for determining penalties for late returns and late payment of VAT applies to return periods commencing on or after 1 January 2023. The same system will also apply to the returns to be submitted under MTD for income tax, when it eventually starts!
Under the new regime, taxpayers will accumulate points for late submissions, and only after reaching a certain threshold will an automatic penalty be imposed. The threshold will depend on how regularly the taxpayer is required to submit a return. For a typical business submitting VAT returns quarterly an automatic £200 penalty will apply when 4 penalty points are accumulated. The system is designed to penalise persistent defaulters rather than those businesses that have an occasional lapse.
It is recommended that you authorise a tax specialist to handle your tax affairs and deal with HMRC on your behalf. This will ensure that all deadlines are met and that you are not paying more tax than you need to.
Our diverse team of tax professionals within the Beavis Morgan group are committed to ensuring that your tax reporting obligations are fully satisfied and that every opportunity to maximise tax savings is made known to you, and by restructuring your affairs in a tax effective and efficient way.
If you have any concerns relating to your tax return or wish to discuss your tax affairs in further detail, please contact Mariske Byrnes or your usual BM Connect adviser.
