Taj Accountants - Taj Accountants - the best accountants in Whitechapel, East London, offering qualitative small business accounting services. Call us at:+44-203-759 5649.
SELECT * FROM post Where post_url ='vat-deadline-penalties-and-how-to-avoid-them'

VAT Deadline Penalties and How to Avoid Them

Abul Nurujjaman, 

VAT Deadline Penalties

VAT is value added tax which can be viewed as a tax on consumer spending and goods imported into the United Kingdom (UK). It can also be examined as a consumption tax based on value added to goods and services. 



The deadlines for submitting VAT is dependent on the deadline shown on your VAT return. There are two different deadlines for submitting your VAT payments, the most common type of VAT is paid 4 times a year it is called VAT MOSS scheme and the other is the VAT annual accounting scheme.


Under the VAT MOSS scheme, businesses need to pay quarterly if the dates happen to be on a weekend or a bank holiday business are required to pay the preceding working day.


These dates are:

20 April for the quarter finishing 31 March

20 July for the quarter finishing 30 June

20 October for the quarter finishing 30 September

20 January for the quarter finishing 31 December


Channel S News- Grand Opening Ceremony 


The VAT annual accounting scheme is a scheme where you pay once a year and the deadline for payment is 2 months from the last day of your accounting period. Under this scheme your predicted VAT taxable revenue or turnover needs to be £1.35 million or less, which makes it an option an advantage for small business owners. Under this scheme businesses can make early VAT payments towards their bill, the amount businesses pay is contingent upon their previous return or it is predicted for business that is new to VAT. Every year only one VAT return is submitted. After submitting their VAT return businesses, can either make a last payment which can be the distinction between their advance or early payments and their definite VAT bill. Business can also file an application for a refund, if they have overpaid on their VAT payment.


Penalties and Surcharges 


Penalties occur when HMRC put a default next to the business account. Defaults are recorded when HMRC does not receive a business s VAT return by the date of the deadline or when the complete payment for VAT has not entered HMRC s account by the deadline.


HMRC can charge a business up to a 100% for a penalty. The first penalty is for £400 if a business submits a paper VAT return unless told otherwise by a HMRC that an online copy is required.

The second penalty is 30% of an assessment which is sent by HMRC which might be low and the business does not tell them it is incorrect within 30 days. An assessment is an estimation given by HMRC of what they think a business owe s them, this is only sent to businesses that have not sent their VAT Return and not paid any VAT that is due on time. 

The third penalty is 100% of any under estimated or over estimated VAT claimed if businesses send a return that includes careless or purposeful errors.



A business can go into a 12 month surcharge period if they default. HMRC will write a letter to a business that defaults describing if they owe any surcharges and what will occur if they were to default again. Defaulting again within this time period could result in the one an addition 12 month extension. Furthermore businesses might have to paid an additional amount including the VAT they already owe.  


The amount the business pays depends on the surcharge percentage on the VAT unpaid on the deadline date for that accounting year which is the default. As seen in the table below the surcharge increases month on month every time the business defaults in the surcharge period. Business can rest easy because they are not charged for their first default. 


Table: how much businesses are to be charged 


Defaults in between 12 months

Surcharge if annual revenue is less than £150,000

Surcharge if annual revenue is more than or is £150,000


No surcharge

2% (there should be no surcharge if it is below £400)


2% (there should be no surcharge if it is below £400)

5% (there should be no surcharge if it is below £400)


5% (there should be no surcharge if it is below £400)

10% or £30 (depends on which one is higher)


10% or £30 (depends on which one is higher)

15% or £30 (depends on which one is higher)

6 months or more

15% or £30 (depends on which one is higher)

10% or £30 (depends on which one is higher)


However, exceptions to the surcharge are made if businesses submit their VAT return after the deadline such as; full payment by the due date, have to pay no tax and are due a VAT repayment. 


How to avoid penalties 

It is in the interest of all business owners to pay their VAT on time in order to avoid penalties. By paying on time and having excellent records are good and effective ways to avoid paying penalties.

At Taj accountants we understand how HMRC penalties work, which in return helps us provide an efficient and effective service to our clients. Our Authorisation as an agent, allows HMRC to deal with us on behalf of our clients. As Advisors at Taj Accountants, we feel all our actions and commitments are geared towards helping you avoid penalties and problems.

We believe we provide our clients with adequate and reliable information on how the system works. This includes looking into our clients record keeping arrangements and processes to see whether or not they are adequate enough to produce accurate returns. 



Taj Accountants Advert



Disclaimer: The information provided in this blog is brought to you by Taj Accountants. As you are reading this blog of your own free will, any information taken from this blog is at your risk. Before using the information provided to apply, to your business seek professional or legal advice.Taj accountants will not be liable for any damages.

Copy link
  • Accountancy and Taxation services for your business
  • Taxi and Black Cab Driver Accountants
  • Self Assessment & Personal Tax Planning Services for Individuals

If you are looking for Small Business Accountants based in London, Taj Accountants is your one-stop solution for bookkeeping, accounts, payroll, tax, business planning and advice.

Taj Accountants can help and advise you to manage your personal taxation affairs, making sure you are taking advice for all the financial amendments and optimising your potential benefits in your interest.
Self Assessment is a system HM Revenue and Customsrsquo; (HMRC) uses to collect INCOME tax. Tax is usually deducted automatically from wages, pensions and...

A limited company is an organisation that you can set up to run your business.
Setting up a limited company is likely to involve more administration and higher costs than if you were a sole trader, but as advantage, your personal finances will be..

As a sole trader, you run your own business as an individual and you are self-employed.
Becoming a sole trader is the simplest way to start a business as setting up a sole trader is quick, easy and preparing sole trader accounts can be simpler.There are many people who start their business...

A partnership is a for-profit business association of two or more parties, known as partners,
who agree to...

Each partner shares organization's profits and control of the business operation. The consequence of this profit sharing is these partners are...

Having been established for years, Taj Accountants stands high among the renowned accountancy firms in London for offering excellent accounting and taxation advice to corporates, as well as individuals. Our clients base range from individuals who are seeking general financial advice to sole traders, limited companies or partnerships. Whatever your goals are, this leading firm is always eager to offer advice and support through its specialized Small Business Accountants team based in London.

Freelance IT Contractors Accountants providing Specialist Services to IT Contractors which is compliant with IR35. As an IT Contractor, you may be worried about financial affairs and tax management. Paying tax in right manner and in right time is essential for any IT Contractor so as to avoid any penalties and avail rebates. All your worries can come to an end if you put your trust in our IT Contractors Accountants at Taj Accountants.

Professional accounts and tax planning for your Restaurant or Takeaway in London. As a Restaurant or Takeaway owner, you may not have the enough time to maintain all your bookkeeping and accounting by yourself. With our support, Restaurant and Takeaway owners in London can stay focused on important aspects related to your business, while we maintain your accounts.

We work for a range of property portfolios including buy-to-let landlords, property investors, developers, housing associations. Whether you are a property rental, a professional buy-to-let landlord or simply a individual renting your home, our specialist Accountants will support and advise you on all the related areas of your rental activity.

London has been a leading international financial centre and continues to maintain a leading position as one in the 21st century. To develop your business in this environment, safe accounting practices are essential and we as Accountants in London, are the pioneers of the same. Good financial and accounting practices are not only desirable, but highly important for every business's profit and escalation. Little thought over bookkeeping and preparing taxes can boost the inherent risk of your business. Let us focus on your accounting needs and we ensure you sound services, meeting all your regulatory requirements in time and accurately.

Our presence is much more than a distant email or voicemail, by working hand in hand to achieve your goals we can assist you to save taxes and keep your books and tax returns according to the Regulatory Authority

We will take the time to develop a thorough understanding of your business, and will manage to achieve your goals through our specialized team of Accountants in London and our wide range of comprehensive consultancy and accounting services.