UK: Penalties for late payment of VAT, other taxes

Changes apply to VAT taxpayers and making tax digital system testers, effective May 31, 2025

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September 12, 2025

HM Revenue & Customs (HMRC) in May 2025 increased penalties for late tax payments of value added tax (VAT) and other taxes, retroactively effective from April 1, 2025.

Penalties increased to:

  • 3% for payments delayed beyond 15 days
  • 3% for delays beyond 30 days
  • 10% annually for unpaid taxes from day 31

The changes apply to VAT taxpayers and making tax digital system testers, effective May 31, 2025.


For more information, contact a KPMG tax professional in the UK:

Emma Abraham | emma.abraham@kpmg.co.uk

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