VAT penalty overhaul confirmed for 2022
The 2021 Budget confirmed that the government is pressing ahead with a change to the way penalties for VAT returns filed late will be charged. What’s happening?
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New HMRC guidance on winter fuel payments
HMRC has released new guidance on the recovery of winter fuel payments. What do you need to know?
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Festive tax breaks for remote workers
You’re familiar with the tax break for Christmas parties but you now have a few remote workers, and the company will need to reimburse their travel and accommodation costs if they attend an event. Which costs count towards the tax-free limit and how can you manage any overspend?
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New process for some exports starting in Northern Ireland
Starting next month, businesses that import goods via Northern Ireland will need to change their processes. What do you need to know?
Currently, penalties for late filing of VAT returns and late payment of VAT are dealt with under the default surcharge regime. This means that where either a return is filed late, or a payment is received late, the business receives a surcharge notice. They are then “on notice” for twelve months, with further defaults penalised by a charge calculated by reference to the tax due. There are several perceived faults with this system. Firstly, a business can avoid a charge for late filing by paying the VAT due in full. Secondly, there is no difference in the level of penalty for a return or payment made one day late compared with one made months late. But all that will change from 1 April 2022.
From that date, there will be separate penalties charged for late filing and late payment. Additionally, the penalties will increase in stages – punishing those who file or pay significantly later more than those who miss deadlines by a few days. A key feature of the new system is that it will no longer be possible to avoid a late filing penalty if the VAT is paid on time, or if the return shows a repayment is due.
Full details of the announcement can be found here.
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