A nil VAT Return can still generate a late-submission point. Paying late creates a separate exposure, and late-payment interest is charged independently.
Late VAT Returns
Each late return normally creates a penalty point. When the business reaches the threshold for its filing frequency, HMRC charges a £200 penalty. A further £200 penalty can arise for each additional late return while the business remains at the threshold.
Late VAT payments
- Up to 15 days late: no first or second late-payment penalty.
- 16 to 30 days late: a first penalty of 3% of the amount outstanding at day 15.
- 31 days or more late: a further 3% applies to the amount still outstanding at day 30.
- From day 31: a second penalty accrues daily at an annual rate of 10% on the outstanding balance.
Late-payment interest is separate and generally runs from the first day the VAT is overdue until payment is made in full.
Controls that reduce exposure
- Track return and payment deadlines separately.
- Submit nil or repayment returns on time.
- Escalate cash-flow problems before day 15.
- Consider a Time to Pay arrangement where appropriate.
- Reconcile HMRC statements so points, penalties and interest are identified promptly.
Submitting the return and paying the liability are two separate compliance events. A good VAT calendar controls both.
This article is general information, not UK tax, accounting or legal advice. Check the linked official guidance and obtain advice for the relevant facts.