Have I got this right - no issue with paying VAT less than 15 days after due date?

[Karimbo]

My vat payment is due from yesterday, I did manage to file the return 5 mins beforee midnight and it showed up immediately on HMRC portal so that was submitted fine.

it seems like the VAT return is more of an issue than payment? Is that the case? You can rack up points for late submissions.

I have the funds in a savings account. it was high than expected and ther eis a 48 hour funds transit delays. I paid 90% of it on time from current account, just waiting on transfer from savings.

Have I got this right? If I pay up to 15 days late from 7th July (my due date), there is no points, fixed penalty or interest paid if I clear it before 22nd July?

It seems a bit leniant compared to previous rules where interest was owned a day after the due date. With fixed penalty for 2nd late payment within a 12 month period.

 

[Newchodge]

My vat payment is due from yesterday, I did manage to file the return 5 mins beforee midnight and it showed up immediately on HMRC portal so that was submitted fine.

it seems like the VAT return is more of an issue than payment? Is that the case? You can rack up points for late submissions.

I have the funds in a savings account. it was high than expected and ther eis a 48 hour funds transit delays. I paid 90% of it on time from current account, just waiting on transfer from savings.

Have I got this right? If I pay up to 15 days late from 7th July (my due date), there is no points, fixed penalty or interest paid if I clear it before 22nd July?

It seems a bit leniant compared to previous rules where interest was owned a day after the due date. With fixed penalty for 2nd late payment within a 12 month period.

I pay my VAT by Direct Debit. HMRC controls when they receive it and they usually take it on the 11th (VAT submission on 7th). So it cannot matter if payment is a few days after 7th, as HMRC is set up for it to be late.

 

[Ziggy2024]

Interest is charged from day 1 of being late until the debt is paid (or if a payment plan is agreed). The late payment penalty kicks in after 15 days which is charged at 2% of the amount owed at that point and is in addition to the interest charged. An additional penalty is imposed if the debt remains unpaid after 30 days.

Late submission penalties are points based, you have to have 4 (I think without checking) before a penalty is imposed.

 

[Bobbo]

You will (or rather, should) be charged interest on late payment.

 

[Newchodge]

Interest is charged from day 1 of being late until the debt is paid (or if a payment plan is agreed). The late payment penalty kicks in after 15 days which is charged at 2% of the amount owed at that point and is in addition to the interest charged. An additional penalty is imposed if the debt remains unpaid after 30 days.

Late submission penalties are points based, you have to have 4 (I think without checking) before a penalty is imposed.

Do you have a source for that, please as it doesn't match my experience.

 

[Ziggy2024]

Do you have a source for that, please as it doesn't match my experience.

Have you paid late? Annoyingly, HMRC will just add the interest on the gateway and only inform you of the penalty in my experience.

www.gov.uk/guidance/how-late-payment-penalties-work-if-you-pay-vat-late

 

[Bobbo]

deleted as duplication of ziggy

 

[DontAsk]

Do you have a source for that, please as it doesn't match my experience.

No mention of interest from day 1 https://www.gov.uk/submit-vat-return/late-returns-and-payment which leads to https://www.gov.uk/guidance/how-late-payment-penalties-work-if-you-pay-vat-late

Pay 2% at day 15, 2% at day 30 and 4% from day 31

 

[Ziggy2024]

No mention of interest from day 1

Pay 2% at day 15, 2% at day 30 and 4% from day 31

From the link:

From the first day your payment is overdue, until you pay in full, we’ll charge late payment interest.

And on a recent penalty letter it says:

We'll still charge you interest on any amount you owe from the date it became overdue. As of the date of this letter, the late payment interest rate is 8.25%.

Your quoted figures are the late payment penalties which are in addition to the interest.

 

[Newchodge]

You are right. I have just checked my VAT account and I owe £0.01 in interest from a slightly late payment in May.

Late payment interest if you do not pay VAT or penalties on time

From 1 January 2023, HMRC will charge VAT-registered businesses late payment interest from the first day their payment is overdue until it is paid in full.

www.gov.uk

 

[Newchodge]

Also, my DD will go out on 11 July, but my account shows that the payment due on 7 July is currently overdue. That seems to get written off when the DD is paid. So the due date is actually 7th.

 

[Ziggy2024]

Also, my DD will go out on 11 July, but my account shows that the payment due on 7 July is currently overdue. That seems to get written off when the DD is paid. So the due date is actually 7th.

Yes due date is the 7th. They gave an extra 7 days when MTD came in if I remember correctly and they give an extra 3 working days grace for the direct debit.

 

[Newchodge]

You are right. I have just checked my VAT account and I owe £0.01 in interest from a slightly late payment in May.

Late payment interest if you do not pay VAT or penalties on time

From 1 January 2023, HMRC will charge VAT-registered businesses late payment interest from the first day their payment is overdue until it is paid in full.

www.gov.uk

Can you pay HMRC £0.01?

 

[ash799]

Can you pay HMRC £0.01?

Im sure they'd happily accept it!

 

[DontAsk]

From the link:

From the first day your payment is overdue, until you pay in full, we’ll charge late payment interest.

Oops, missed that.

 

[Karimbo]

hmrc trying to reinvent the offisde rule for payments. why not just keep it simple. points, interest etc. what a joke. I'll pay the money asap.

I have credit interest on my corp tax, so I guess its swings and roundabouts.

 

[Karimbo]

How does one go about paying the interest on the VAT?

It happened about a year ago as well. I owe 53p of interest, I did a bank transfer of 53p to the VAT account (paid using bank trasnfer). But on the VAT account, I see a 53p interest charge and a 53p unallocated payment as well.

Do I need to phone them up to inform there, maybe there's a different method to pay the interest, maybe they dont collect until it becomes a substantial figure, like interest they owe for corporation tax, they dont seem to apply it to the corp tax balance

In any case, i'll phone them up on Monday, the VAT helpline is ususally easier to get hold of than other HMRC brances. Might as well get this correct before they issue a fine for not paying the interest.