HM Revenue & Customs have announced that a new penalty regime comes into force from April 2022 in respect of the late filing of VAT returns.  Historically the farming sector have not been subject to late filing penalties as the previous regime applied a surcharge to amounts owed, with farming businesses receiving refunds each month/quarter the late filing of VAT returns have not had financial penalties imposed by HMRC.

However, from April 2022 a flat penalty of £200.00 may be imposed for any late VAT submissions. This will apply even if it is a repayment return.

A points based system is going to be imposed from April 2022; one point for each VAT return filed late. Once you reach the maximum number of points (2 points for annual returns, 4 points for quarterly returns and 5 points for monthly returns) penalties will be imposed. The points remain on your record for 2 years and 1 day. Once you reach the maximum number of points and penalties are imposed you need to file all returns on time for a period of compliance to remove the penalty points from your VAT record. The period of compliance is 24 months for annual returns, 12 months for quarterly returns and 6 months for monthly returns.

Therefore to ensure you are not subject to any penalties in the future please ensure all your records and information is sent to us in plenty of time. We will of course continue to contact you in plenty of time to request information not received.

If you complete your own VAT returns please make sure the returns are submitted prior to filing deadlines.

If you have any questions or queries regarding this, please get in touch with our VAT specialist Matthew Welsh.