The penalties applied for submitting your VAT return late or not paying your VAT liability on time are changing for all VAT periods starting on or after 1 January 2023.
There will also be changes to how late payment interest is charged.
The amendment of the Value Added Tax Act 1996 will take effect from 1 January 2023.
What you need to do to avoid a penalty or interest
As long as you submit your VAT returns and make your VAT payments on time you will not receive a penalty or be charged late payment interest.
What is changing
Late VAT returns
This applies to all VAT returns, including “nil” returns and those seeking a refund of VAT from Customs & Excise. You must make sure that you submit all of your VAT returns on time to avoid a late return penalty.
If you submit VAT returns late you may be fined £200.
Late VAT payments
If you do not make your VAT payments on time you may incur a late payment penalty, which is based on a percentage of how much VAT remains outstanding.
You may also be charged late payment interest.
Where you can find more information
Guidance is available under downloadable documents to explain how the penalties and interest will be applied from 1 January 2023.
If you are unable to make your VAT payments on time contact Customs and Excise via email at dmu.customs@gov.im or telephone at +44 1624 648160 (Monday to Friday 8.30am to 4.30pm).
For general enquiries please email customs@gov.im or call +44 1624 648130 (Monday to Friday 8.30am to 4.30pm).
