HMRC has introduced a new penalty regime for VAT returns that are submitted late and VAT which is paid late. The way interest is charged has also changed.
A new penalty regime for VAT comes into effect for VAT return periods starting on or after 1 January 2023. Businesses should familiarise themselves with the changes to avoid getting caught out by some of the finer detail.
Making Tax Digital for VAT (MTDfV) will be extended to all VAT registered businesses with effect from 1 April 2022. HMRC recently issued a reminder for VAT registered businesses to take steps to prepare for MTDfV before it becomes mandatory.
The Government has announced a delay to the introduction of the new penalty regime for VAT. The new system had been due to come into effect from 1 April 2022, however, this has been delayed by nine months until 1 January 2023.
The VAT refund process for EU businesses incurring UK VAT changed from 1 January 2021. The electronic EU refund process can no longer be used. Instead form VAT65A must now be completed and submitted to HMRC.
The government is introducing new rules from 1 April 2022 which require large businesses to notify HMRC when they take an uncertain tax position. The taxes within scope of the requirement to notify are Corporation Tax, Income Tax (when returned in a Partnership or PAYE return), and VAT.