A financial penalty may be charged if you did not take any action to pay your deferred VAT in full, or failed to make an arrangement to pay by the deadline of 30 June 2021.
The legislative framework for the penalty is contained in the Finance Act 2021 section 99 and schedule 19.
The penalty is calculated based on the amount of unpaid deferred VAT. The penalty is charged at 5% of the deferred VAT that is unpaid when the penalty is assessed.
However, it is possible to negotiate with HMRC over payments, particularly in light of the impact of covidd-19 on businesses. The latest guidance states that businesses can make an arrangement to pay either by joining the VAT deferral new payment scheme or by contacting HMRC to agree extra help to pay.
Once a penalty assessment is received, businesses have 30 days to make payment to settle the outstanding VAT charge.
RJS Associates can help you appeal to the HMRC – contact us if you need some advice!