HMRC can be very strict on missed deadlines, so if you fail to register for VAT when you should have done, you may face a penalty. You'll also be expected to pay the VAT due from the date that you should have registered, even if you weren't charging for it on goods and services.

The penalty is based on how late you are in registering for VAT, with a minimum charge of £150. Nine months or less incurs a 5% penalty. Over 9 and less than 18 months incurs 10%, whilst over 18 months means a 15% penalty.

If you are penalised for late registration, HMRC will notify you, and include guidance on how to appeal the decision.

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