UK VAT Penalties 2025: Late Filing & Payment Rules Explained
Missing a VAT deadline can be expensive for UK businesses. Whether you submit your VAT return late or delay payment, HMRC applies penalties that increase the longer the issue remains unresolved.
Since January 2023, HMRC replaced the old default surcharge with a penalty points–based system, which continues in 2025. While fairer, repeated delays can still result in significant fines.
At 11TaxAssist, we help UK businesses, freelancers, and overseas clients stay fully compliant with HMRC VAT rules. This guide explains how VAT penalties work and how to avoid unnecessary charges.
How VAT Filing Works in the UK
- VAT returns are due one month and seven days after the VAT period ends
- VAT submission must reach HMRC by the deadline
- VAT payment must be made on time
- Missing either can trigger penalties and interest
UK VAT Penalties Explained
- Late VAT return penalties (points-based)
- Late VAT payment penalties (percentage-based)
Penalty for Late VAT Return Submission
- Each late return adds 1 penalty point
- Reaching the threshold triggers a £200 penalty
- Each additional delay adds another £200
Penalty Thresholds by Filing Frequency
- Annual returns: 2 points
- Quarterly returns: 4 points
- Monthly returns: 5 points
A quarterly filer missing four deadlines receives a £200 penalty. Each further delay adds another £200.
How to Reset VAT Penalty Points
- File all VAT returns on time for a compliance period (usually 12 months)
- Submit all outstanding VAT returns from the last 24 months
Penalty for Late VAT Payment
- Up to 15 days late: No penalty
- 16–30 days late: 3%
- Over 30 days late: 3% + 3%
- Daily interest at 10% per year
Step-by-Step VAT Filing Guides
Filing VAT correctly and on time is the best way to avoid penalties. Use our detailed guides below:
Stay VAT Compliant with Expert Support
VAT penalties in the UK can escalate quickly if ignored. Staying organised and using expert support helps you avoid fines, interest, and unnecessary stress.
11TaxAssist handles VAT registration, returns, payments, and HMRC communication—so deadlines are never missed.