CH193120 - Penalty reform - penalties for failure to pay VAT on time from 1 January 2023: how late payment penalties work: overview
NB: “»Ê¹ÚÌåÓýappse rules currently only apply to VAT for VAT periods starting on or after 1 January 2023. »Ê¹ÚÌåÓýappse rules will come into force for other tax regimes at a future date. You must check the date from which these rules apply for the tax or duty you are dealing withâ€�
All taxpayers, regardless of the tax regime, have a legal obligation to pay their tax by the due payment date for that tax. Where a person fails to pay the full amount of tax by the due date, they may become liable to a penalty or penalties.
»Ê¹ÚÌåÓýappre are two late payment penalties that may apply: a ‘First penaltyâ€� and a ‘Second penaltyâ€�.
»Ê¹ÚÌåÓýapp person will not incur a late payment penalty if the outstanding VAT is paid within the first 15 days after the due date, or if a Time to Pay (TTP) agreement is made as a result of proposals made before the end of the 15-day period.
See CH193160 for the effects of agreeing a TTP and what happens if the person breaks the TTP.