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Since April 2010 all newly registered businesses and existing businesses with a turnover of £100,000 or more have been legally required to submit their VAT Returns online and pay electronically.
From April 2012 all remaining VAT-registered businesses are also legally required to submit their VAT Returns online. This means that virtually all VAT- registered businesses, apart from a very small number that are exempted, now have to submit their VAT Returns online.
This guide explains the circumstances in which HM Revenue & Customs (HMRC) will charge a penalty if you submit a paper return when you are required to submit your return online.
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Since April 2010 you had to submit your VAT Returns online and pay any VAT due electronically if either of the following applied:
From 1 April 2012 virtually all VAT- registered businesses, apart from a very small number of exemptions, have to submit their VAT Returns online and pay any VAT due electronically.
Read more about moving from paper to online VAT Returns
Read about exemptions from doing your VAT online
If you were required to submit your returns online from 1 April 2010 or were registered for VAT on or after that date, you will be charged a penalty if you submit a paper return for accounting periods ending on or after 31 March 2011.
If you were VAT registered before 1 April 2010 and were first required to submit online returns from 1 April 2012, you will be charged a penalty if you submit a paper return for accounting periods ending on or after 31 March 2013.
HMRC may also charge separate penalties if you pay late or make an error on your return.
Read more about penalties for mistakes and delays with your VAT
The amount of each penalty will depend on your annual turnover (excluding VAT). The calculation of your turnover is based on the 12 months’ figures up to, and including, those on the paper return which triggers the penalty. The table below shows the different amounts of penalty.
| Annual VAT-exclusive turnover | Penalty |
|---|---|
| £22,800,001 and above | £400 |
| £5,600,001 to £22,800,000 | £300 |
| £100,001 to £5,600,000 | £200 |
| £100,000 and under | £100 |
If HMRC charge you a penalty they will tell you in writing how you can pay it.
For more information on ways you can make payments to HMRC follow the link below.
How to pay a penalty for submitting a paper VAT Return
If you disagree with a penalty HMRC has charged for submitting a paper VAT Return you can:
You can ask for a penalty to be reviewed if any of the following apply:
A reasonable excuse is normally an unexpected or unusual event, either unforeseeable or beyond your control, which prevents you from submitting your return online. Relying on someone else to submit the return on your behalf does not count as a reasonable excuse. Each case will be considered on its own facts.
If you want a penalty to be reviewed, write to:
HM Revenue & Customs
Appeals Unit - VAT Online
Crownhill Court
Tailyour Road
Crownhill
Plymouth
PL6 5BZ
You should write within 30 days of the date on the penalty notification letter, give your reasons why you do not agree with the penalty and enclose any information you think is relevant. HMRC will not try to collect the penalty while the review is carried out.
If you want to appeal to an independent tribunal, you should do so within 30 days of the date of the penalty or HMRC’s decision to uphold a decision following review.
If you opt for a review, you can still appeal to the tribunal after the review has finished.
Find out more about appeals and reviews
Find out more about tribunals on the HM Courts & Tribunals Service website (Opens new window)
