Penalties explained
The VAT penalty points system explained
VAT late-submission penalties changed to a points system in 2023. One late return no longer means an automatic fine - but the points add up.
How points work
- Each late VAT return earns one penalty point.
- A £200 penalty is charged only when you reach the points threshold for your filing frequency - 4 points for quarterly, 5 for monthly, 2 for annual.
- After the threshold, every further late return is another £200.
Clearing points
Points expire after 24 months if you are below the threshold. Once you are at the threshold, you must submit all returns on time for a set period and be up to date to reset to zero.
Late payment of VAT
VAT late payment is charged separately - a first penalty from 15 days late and a second from 30 days, plus interest. A Time to Pay arrangement can prevent them.
Last reviewed September 2026. General information, not tax advice - check your penalty notice and GOV.UK for your exact figures.
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