If you’ve reached the threshold for late submission penalty points, you’ll need to take action to remove them to avoid further £200 penalties.
If you have not reached the threshold, individual points will expire automatically.
If you’ve not reached the penalty point threshold
If you’ve not reached the threshold for penalty points for your accounting period, individual points will expire automatically. Your accounting period is when you usually need to send a VAT Return to HMRC, for example quarterly.
When penalty points expire depends on the date your return was due, but it normally takes around 24 months.
If the deadline for your return was:
- not the last day of a month — a penalty point expires on the last day of the month, 24 months after this
- the last day of a month — a penalty point expires on the last day of the month, 25 months after this
Remove all penalty points if you’re at the threshold
If you’ve reached the penalty points threshold and have the maximum points allowed for your accounting period, you can only remove them by meeting both conditions A and B.
A: complete a period of compliance, submitting all returns by the deadline.
B: submit all outstanding returns for the previous 24 months.
Before you start, identify any support that may help you submit your VAT Returns to meet both conditions A and B.
Complete a period of compliance (condition A)
A period of compliance is when you submit all your returns on time.
When to start a period of compliance
To work out the earliest date you can start a period of compliance, follow these steps:
-
Record the day after the missed deadline for your accounting period.
-
Record the first day of the month following the date recorded in step 1.
-
Start your period of compliance on the date recorded in step 2.
| Missed submission example date | Earliest start — period of compliance |
|---|---|
| 7 July | 1 August |
| 31 March | 1 May |
Returns you’ll need to make
Depending on your accounting period, you’ll be expected to make these VAT Returns on time during a period of compliance.
| Accounting period | Period of compliance | Returns to make |
|---|---|---|
| Annual | 24 months | 2 |
| Quarterly | 12 months | 4 |
| Monthly | 6 months | 6 |
Submit all outstanding returns (condition B)
You will also need to submit any outstanding returns for the previous 24 months. The 24 months will include the period of compliance.
Example of removing points (quarterly returns)
Watch a video guide that covers how to remove late submission penalty points in videos and webinars for VAT.
Company X submits their return quarterly, so their late submission penalty threshold is 4 points. By 7 August 2024, they’ve reached the threshold by failing to submit returns due on these dates:
- 7 May 2023 (covering January to March 2023)
- 7 November 2023 (covering July to September 2023)
- 7 February 2024 (covering October to December 2023)
- 7 August 2024 (covering April to June 2024)
Meeting condition A
To meet condition A, company X must submit all VAT returns on time for 12 months. As 7 August 2024 was the date of the last missed deadline, the 12-month period of compliance will:
- start on 1 September 2024 at the earliest
- end 12 months later, on 31 August 2025
Company X submits all their returns due between 1 September 2024 and 31 August 2025 on time. This is 4 returns and means that they have met condition A.
Meeting condition B
To meet condition B, company X needs to have submitted all outstanding VAT Returns due in the previous 24 months.
Company X submits the outstanding returns that were due in February 2024 and August 2024. All the returns due in the period from 1 September 2022 to 31 August 2025 have now been submitted so condition B is met.
Company X’s penalty points will be reset to zero on the first day where both condition A and condition B are met.
