In a written ministerial statement, the Financial Secretary to the Treasury has announced that the planned reform of the VAT penalties and interest regime for late filing and payment will be delayed until 1 January 2023.
Finance Act 2021 set out the new penalties and interest for VAT, together with reform of penalties and interest for other taxes which will coincide with the mandation of making tax digital for income tax self-assessment.
Schedules 24 and 26 which introduce the late filing and payment penalties across the various taxes (including VAT) had been expected to be brought into effect from 1 April 2022 for VAT purposes. The penalties for income tax are expected to align with the introduction of making tax digital for income tax self-assessment. Regulations will need to be made to give effect to those schedules in two stages to reflect the announced delay in relation to VAT.
Schedule 29 introduces the new rules for repayment interest and late payment interest for VAT purposes (in amendments to FA 2009 Schs 54 and 54A). These changes will presumably now also be brought into effect by regulations from 1 January 2023.
The minister’s statement notes that the extra time will allow HMRC to prepare its IT systems for the new penalties and interest charges.
In a written ministerial statement, the Financial Secretary to the Treasury has announced that the planned reform of the VAT penalties and interest regime for late filing and payment will be delayed until 1 January 2023.
Finance Act 2021 set out the new penalties and interest for VAT, together with reform of penalties and interest for other taxes which will coincide with the mandation of making tax digital for income tax self-assessment.
Schedules 24 and 26 which introduce the late filing and payment penalties across the various taxes (including VAT) had been expected to be brought into effect from 1 April 2022 for VAT purposes. The penalties for income tax are expected to align with the introduction of making tax digital for income tax self-assessment. Regulations will need to be made to give effect to those schedules in two stages to reflect the announced delay in relation to VAT.
Schedule 29 introduces the new rules for repayment interest and late payment interest for VAT purposes (in amendments to FA 2009 Schs 54 and 54A). These changes will presumably now also be brought into effect by regulations from 1 January 2023.
The minister’s statement notes that the extra time will allow HMRC to prepare its IT systems for the new penalties and interest charges.
