HMRC's Making Tax Digital (MTD) programme has resulted in a re-design of penalties for late filing and payment. 

Subscribers see Penalties: points based system and Penalties (VAT)

This is a freeview 'At a glance' guide to penalties under the Making Tax Digital regime.

At a glance

Late submission penalties 

Finance Act 2021 introduced a points-based late filing penalty regime which will replace existing late filing penalties for VAT (from January 2023) and Income Tax. 

This measure was consulted on in 2018, see Penalties: points based system

Late payment penalties

An amended Late payment penalty regime will be aligned across the main taxes. 

Implementation 

The new late payment and late submission penalty rules will apply as follows:

Interest harmonisation 

The interest rules for VAT align with Income Tax rules from January 2023. 

See Penalties (VAT)

Useful guides on this topic

Penalties (VAT)
When do penalties apply for VAT? What penalties are charged and how can they be mitigated?

Penalties: Late Filing MTD
A points-based late submission penalty regime is replacing existing late submission penalties for VAT and Income Tax Self Assessment (ITSA) under Making Tax Digital.

Penalties: Late Payment MTD
Penalties for late payment of tax under Making Tax Digital for VAT and Income Tax.

Penalties: Late Payment
What penalties are charged when tax is paid late? 

Grounds for Appeal: Reasonable excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?


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