UK – Increase in late VAT payment penalties

April 14, 2025 Global VAT Updates

From 1st April 2025, HMRC introduced stricter regulations to reduce the VAT gap and ensure more taxpayers fulfil their VAT obligations on time by increasing penalties for late payment of VAT. Under the new regulation, penalties are as follows:

  • 3% of unpaid VAT for late payment up to 15 days,
  • 3% of unpaid VAT for late payment up to 30 days (on top of the 3% penalty for late payment up to 15 days).
  • 10% of unpaid VAT for late payment by 31 days or more.
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