United KingdomManual

The UK has a standard VAT rate and one reduced VAT rate. In addition, a number of items are zero rated

VAT penalties in UK

The following table summarizes the VAT penalties regime in the UK:

  • Cause
  • Late filing
    In practice, there are no penalties for a late VAT return provided the payment has been made in time.  However, a "Surcharge Liability Notice" may be initiated when missing one return. See below
  • Late payment

    The UK authorities send a "warning" the first time a VAT return or a VAT payment is missed. The warning is called "Surcharge Liability Notice" and gives the taxpayer a 12-month trial period in which, if the error is repeated, a penalty will be charged

    In case the conditions in the Surcharge Liability Notice are not met (e.g. error repeated), a surcharge of 2% of the VAT due will apply. This penalty will increase to 5%, 10% or 15% if the error is repeated again. Also, an extended "Surcharge Liability Notice" will be issued

    More information available in the online guidance published by the tax authorities

  • Late registration

    As such, there is no one-off penalty for a late VAT registration. However, late VAT payment penalties in periods in which you are not VAT registered will be fined as follows:

    - Less than 9 months late: 5% of VAT due

    - 9 to18 months late: 10% of VAT due

    - More than 18 months late: 15% of VAT due

If an intra-Community acquisition or any other purchase under the reverse charge mechanism is missed, the UK authorities will normally not apply any penalty.

Additional penalties may be charged by the authorities, particularly in case of fraud.

For penalties on ECSL, Intrastat and other returns, please see the relevant section.

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