New guidance recently published by HMRC confirms that there will be a form of “soft landing” to allow for a period of familiarisation with the new VAT penalty rules which come into operation from 1 January 2023. More detailed guidance about the changes to VAT late submission penalties, late payment penalties and VAT interest charges will be published in December 2022.
HMRC will not charge a first late payment penalty in the first year from 1 January 2023 until 31 December 2023, if the business pays in full within 30 days of its payment due date. More information on the new regime is available in the guidance.
The new VAT penalties and interest rules were originally due to come into operation in April 2022 but were delayed as recommended by Chartered Accountants Ireland.