VAT penalties and points

HMRC runs a points-based system for late VAT returns, and separate penalties for paying late. Kontala shows your position under Penalties & points on the VAT Dashboard, read live from HMRC.

Late submission points

Each VAT return submitted late earns a penalty point. Reach your points threshold and HMRC charges a financial penalty - the threshold depends on how often you file.

Kontala shows your points as a meter, for example 2 of 4, using the threshold HMRC reports for your business. If you are in the clear, you see a No penalties badge.

The full rules, including how points expire, are in HMRC's guidance on penalty points and penalties for late VAT returns.

Late payment penalties

Paying your VAT late can also attract penalties, which grow the longer the payment is outstanding. Any charges HMRC has raised appear in the same card, listed as Late submission or Late payment with their amounts.

How the charges are worked out is set out in HMRC's guidance on how late payment penalties work if you pay VAT late.

Staying penalty-free

• Watch your File by dates - see VAT periods and due dates.
• Submit your return once the period ends, rather than waiting for the deadline.
• Pay promptly after filing - see After you file.

If a penalty on the dashboard looks wrong, check your VAT account with HMRC directly - Kontala only displays what HMRC reports.