Penalties
You'll learn how HMRC penalises incorrect VAT returns, late submissions, and late payments—and crucially, how to minimise or avoid these penalties through proper disclosure and timely compliance.
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In this lesson
- 0:00 VAT penalties for incorrect returns
- 0:55 De minimis limit and error disclosure rules
- 2:02 Late submission penalties and points system
- 3:08 Worked example: Late VAT return penalties
- 4:37 Late payment penalties and thresholds
- 5:40 Worked example: Late payment penalty calculations
About this lesson
This lesson covers the penalty framework for errors (based on taxpayer behaviour, from 30% to 100% of unpaid tax), the de minimis relief that lets you correct small errors on your next return, and the points-based system for late returns that triggers £200 penalties once you hit four points. You'll also work through the late payment penalty structure, where payments made 16–30 days late incur 3% of the VAT owed, and payments over 30 days late face 6% plus daily interest at 10% per annum. Essential knowledge for TX and ATX candidates preparing for the exam.
Duration: 7m
Transcript
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