`The Chartered Institute of Payroll Professionals
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HMRC’s tax agent blog covers the FAQs of the new P87 form Published: 12 May 2022 Emailed: 18 May 2022
HM Revenue and Customs has released a blog covering frequently asked questions for tax agents. It details why the changes have been made, what happens to old forms sent in before the close off date and what happens to old forms sent after the date.
The blog site has many useful links to historic blogs and information relevant to tax agents but can also be useful to all those in the payroll and accountancy professions to keep up with changes.
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Are you aware of changes to VAT penalties and VAT interest charges? Published: 18 May 2022 Emailed: 18 May 2022 Her Majesty’s Revenue and Customs (HMRC) has confirmed the default surcharge for submitting value-added tax (VAT) returns or paying VAT late will be replaced by new penalties, for VAT periods starting on or after 1 January 2023. The way VAT interest is calculated will also be changing. If a VAT return is submitted late, the associated penalties will work on a points-based system. For each VAT return that’s submitted late, one late submission penalty point will be applied. Once a penalty threshold is reached, a £200 penalty will be charged, along with an additional £200 for every other late submission.
The table below shows how the late submission penalty points threshold will vary based on the frequency of submissions:
Submission frequency
Penalty points threshold
Period of compliance
Annually
2
24 months
Quarterly
4
12 months
Monthly
5
6 months
If VAT isn’t paid on time, the sooner the amount is paid, the lower the associated penalty rate.
Time overdue
Penalty rate
Up to 15 days
No penalty if the VAT owed is paid in full or a payment plan agreed on or between days 1 and 15
16 - 30 days
First penalty calculated at 2% of the VAT owed at day 15, if VAT is paid in full or a payment plan agreed on or between days 16 and 30
31 days or more
First penalty calculated at 2% on the VAT owed at day 15, plus 2% on the VAT owed at day 30. A second penalty calculated at a daily rate of 4% per year for the duration of the outstanding balance. This is calculated when the outstanding balance is paid in full, or a payment plan is agreed
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