VAT late payment penalties and interest

VAT late payment penalties are changing for VAT periods ending on and after 1^st April 2025.

			Penalty
	Days after deadline	Actions	Current	wef 1st April 2025
First penalty (Fixed percentage penalty)	0-15	Pay in full or arrange a time to pay before 15th Day	No penalty	No penalty
	16-30 inclusive	Pay in full or arrange a time to pay between 16- 30th day	2% on outstanding amount at day 15	3% on outstanding amount at day 15
	31 plus	Pay in full or arrange a time to pay after day 31	2% on outstanding amount at day 15 plus 2% on outstanding amount at day 30	3% on outstanding amount at day 15 plus 3% on outstanding amount at day 30
Second penalty (Interest like penalty)	31 plus	Untill paid in full or arrange a time to pay	At 4% per annum for the duration of outstanding amount	At 10% per annum for the duration of outstanding amount

No change in late payment interest rules. Interest charged from due date till payment date at 2.5% plus Bank of England Base rate per annum.

Source

Spring Statement 2025 (HTML) – GOV.UK

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