Non payment of deferred VAT from 2020
HMRC have recently announced that they now have procedures in place to charge a penalty if taxpayers did not take any action to pay their deferred VAT in full, or failed to make arrangements to pay in instalments by the 30 June 2021 deadline.
The penalty is calculated at 5% of the deferred VAT which is unpaid at the time HMRC assess the penalty.
If you receive a penalty assessment, please do not ignore it is due for payment within 30 days of the assessment date.
You may be able to appeal the penalty (but need to act quickly as appeals normally have to be made within 30 days of the date of issue) if you can show you had a ‘reasonable excuse’ for not paying or paying late. It is also possible to request what is known as a statutory review which would mean the penalty would be reviewed by another HMRC officer who was not involved in the original decision.
However, it may still be possible to negotiate with HMRC about your payments if you are still unable to pay because of coronavirus. Success is not guaranteed but it worth speaking to them as soon as possible to see if they will agree extra time to pay.