The change to the VAT penalty points system were delayed by nine months due to the pandemic, as they were originally expected to come into effect in April 2022.

For VAT periods starting on or after 1 January 2023, the default surcharge will be replaced by new penalties based on a points system if a VAT return is submitted late or VAT is paid late.

Any nil or repayment VAT returns received late will also be subject to late submission penalty points and financial penalties.