Andrew Needham looks at the new penalty system for late returns and payments.
For periods starting after 1 January 2023, a new system of penalties will be introduced for late returns, replacing the existing system.
A new points-based penalty regime will be introduced for late returns. Businesses will receive a point every time they miss a submission deadline. HMRC will notify them of each point. At a certain threshold of points, a financial penalty of £200 will be charged. The threshold is determined by how often a taxpayer is required to make their submission.
When a business has reached the relevant threshold, as determined by their submission frequency, a penalty will be charged for that failure and every subsequent failure to make a submission on time, but their points total will not increase.
The penalty thresholds will be as follows:
