If you are registered for VAT (Value Added Tax) in the UK, it is your legal obligation to submit VAT returns to HM Revenue and Customs (HMRC) on time. Failure to submit VAT returns can have several consequences:
Penalties and fines: HMRC may impose penalties for late submission or non-submission of VAT returns. The amount of the penalty depends on the circumstances and the length of the delay. The penalty can be a fixed amount or a percentage of the VAT due.
Interest charges: If you fail to submit your VAT returns on time and there is VAT outstanding, HMRC may charge you interest on the amount due. The interest is calculated from the date the payment was due until the date it is received by HMRC.
Legal action: In severe cases of persistent non-compliance or deliberate evasion, HMRC may take legal action against you. This can result in court proceedings, fines, or even imprisonment.
Loss of VAT registration: If you repeatedly fail to submit VAT returns, HMRC may deregister you for VAT. This means you will no longer be able to charge or claim VAT, which can have significant implications for your business.
Increased scrutiny: Non-compliance with VAT obligations can lead to increased scrutiny from HMRC. They may conduct investigations, audits, or inspections to ensure compliance. This can be time-consuming, disruptive, and may result in further penalties or liabilities if irregularities are found.
It is important to meet your VAT obligations and submit your returns on time to avoid these consequences. If you are having difficulties or anticipate challenges in meeting your VAT obligations, it is advisable to contact HMRC or seek professional advice to explore available options and avoid potential penalties.
This page is not actively updated, some information may be out of date and should not be used for professional advice.