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VAT penalties and surcharges for late filing


Our partners at AVASK, the accounting and business consultants, have given us with an update for e-tailers on the latest VAT penalties and surcharges for late filing. 

For companies considering global expansion, or have already discovered the opportunities of new markets, the Value Added Tax (VAT) or Goods and Services Tax (GST) obligations in Europe can be incredibly complex and distracting. The AVASK team help hundreds of ecommerce sellers to make their VAT compliance as simple as possible.


VAT penalties and surcharges for late filing
  • If HMRC record a “default” on your UK VAT account, your account may enter a “surcharge period” that will last 12 months. During a surcharge period, HMRC will monitor your VAT account closely. A default will be recorded if HMRC does not receive your VAT return by the deadline, or if the full payment for the VAT return does not reach its account by the deadline. The deadline for filing a VAT return is one month and seven days after the end of an accounting period and you will need to allow time for the payment to reach HMRC’s account.
 
  • If, during the surcharge period, you default again, your surcharge period may be extended by an extra 12 months, or a surcharge will be placed upon the amount you already owe to HMRC. Surcharges are calculated on a percentage of your VAT liability.
 
How much you’ll pay

This table outlines what percentage you may be liable to, and under which circumstances:




Exceptions

There is no surcharge if you submit a late VAT Return and:
  • Pay your VAT in full by the due date
  • Have no tax to pay
  • Are due a VAT repayment
 
Penalties
 
HMRC can charge you a penalty of up to:
  • 100% of any tax under-stated or over-claimed if you send a return that contains a careless or deliberate inaccuracy
  • 30% of an assessment if HMRC sends you one that’s too low and you don’t tell them it’s wrong within 30 days
  • £400 if you submit a paper VAT Return, unless HMRC has told you you’re exempt from submitting your return online
 
To ensure your completed tax return is accurate, it’s vital to keep a copy of your Amazon sales data and shipping/VAT invoices for the relevant period. If you’re having any trouble with UK VAT, contact a tax advisor to avoid the surcharges for late filing. 


 

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