Budget 2021: Amendments to penalties for late submission and payment of tax
07 March 2021
The Government has announced that a series of changes will be made in relation to the harmonisation of interest and to penalties for the late submission and payment of tax.
The move is being made in order to ensure that the penalty regime for VAT and Income Tax Self-Assessment is fairer and more consistent. The new late submission regime will be based on points, and only when the relevant threshold is reached will a financial penalty be issued. The amount of the penalties issued will be equivalent to how late the tax that is owed is, and also to the amount of tax that is outstanding.
Interest charges and repayment interest will be changed so that VAT is more comparable to other tax regimes.
The timeline for the reforms is as follows:
- From periods commencing on or after 1 April 2022, the reforms for VAT taxpayers will come into effect
- From accounting periods beginning on or after 6 April 2023, reforms for taxpayers in Income Tax Self-Assessment with businesses or property income exceeding £10,000 per year will come into effect
- The reforms for all other taxpayers in Income Tax Self-Assessment will come into effect from periods beginning on or after 6 April 2024
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.