13 January 2022 
Andrea Marshall, Tax Specialist
Update on 13 January 2022
HMRC have announced this afternoon that the introduction of the later submission penalties have been delayed from 1 April 2022 until 1 January 2023.
The postponement covers the 2% penalties (that apply on day 16 and 30 for outstanding VAT) PLUS the new points based system that leads to £200 fines for non-production of documents or information requested by HMRC. For further infrormation, please see:
Interest harmonisation and penalties for late submission and late payment of tax
Penalties for late payment and interest harmonisation
These regimes also apply to Income Tax returns, but are being introduced in stages. So they come in for VAT on 1 January 2023, ITSA returns (with income over £10k) from the tax year beginning 6 April 2024, and for all other ITSA returns from the tax year beginning 6 April 2025.
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A new points based penalties system for late VAT and Income Tax Self Assessment (ITSA) submissions is being introduced. It will apply to VAT returns beginning on or after 1 April 2022. Further information can be found in this HMRC policy paper.
The paper states that "The new late submission penalties will affect those who fail to meet their obligations to provide returns and other information requested by HMRC on time."
The penalty thresholds for late submission will be as follows:
| Submission frequency | Penalty threshold |
|---|---|
| Annual | 2 points |
| Quarterly (including MTD for ITSA) | 4 points |
| Monthly | 5 points |
The paper says "At a certain threshold of points, a financial penalty of £200 will be charged and the taxpayer will be notified. "
In this instance it does not seem that points mean prizes!
