Penalties for late filing of VAT returns

We’re now seeing clients who have been given points for failing to file VAT returns on time. As a reminder, if a return for a VAT period beginning on or after 1 January 2023 is late, HMRC can award a penalty point. Clocking up 4 penalty points (quarterly returns) or 5 (monthly) and you’ll receive a £200 penalty. You’ll also receive a further £200 penalty for each subsequent late submission while you’re at the threshold.

There is a defence of “reasonable excuse”, and we are seeing clients get points who may well have a reasonable excuse for their late filing. However, I do wonder whether lodging a reasonable excuse appeal will be cost-effective if the client has a one-off software glitch and is unlikely to accumulate any further points.