Late registration penalty

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Late registration penalty
  • Penalty
  • Mitigating the penalty
  • Appeals

This guidance note provides an overview of the late registration penalty that can be imposed on businesses that do not VAT register at the correct time. Please note that this penalty has been replaced by the new VAT penalty regime that came into effect from April 2010. Please see the Overview of the three penalties introduced from 1 April 2010 guidance note for more information. However this penalty can still be imposed on a business that was required to be VAT registered before the new penalty regime came into effect.

Businesses are legally required to VAT register when they exceed the UK VAT registration threshold and HMRC imposes strict deadlines regarding the effective date of registration. If the business does not register by the required date (before the 1 April 2010), it would have been subject to a late registration penalty. Please see the Overview - registering for VAT guidance note for more information.


The late registration penalty is calculated as a percentage of the total VAT due from the date the business should have registered for VAT to the date that HMRC became aware that the business should have been VAT registered.

The percentage rate depends on how late the business VAT registered. The following penalties applied:

How latePenalty percentage
not more than nine months late

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