The Repercussions of Failing to Register for VAT in the UK


What occurs if you don’t register for VAT? HMRC may issue you a severe fine and damage your reputation if you fail to register for VAT or don’t comprehend how the system operates.

It’s crucial to check your taxable sales every month if you’re getting close to the threshold because the rolling 12-month term utilised for VAT registration, as opposed to the tax year or calendar year, may be perplexing to some.

The Repercussions of Failing to Register for VAT

Please let us know when the deadline is so we can discuss the possible consequences of failing to register your business for VAT on time.

  • If your taxable sales for the year total more than £85k
  • If you think your taxable sales will go above the cap in the following month

If you need help with registering for VAT, you may contact Bolton accountants. 

Penalties for Not Notifying

If you don’t register for VAT, the HMRC will impose a failure to notify penalty on you. The penalty increases every day that registration is past due and is based on the amount of outstanding tax. (A £50 minimum fine applies.)

How Late Was Your VAT Registration? 

  • Nine months or under – You will also be responsible for paying an additional 5% of the total price.
  • Between nine and 18 months late – 10% more is added to the amount you owe for each missed payment
  • Over 18 months – 15% of the total amount you owe in addition to your regular payment

Penalty for Civil Evasion

Suppose HMRC has a good basis to believe you have engaged in purposeful tax evasion. In that case, they may launch a civil evasion tax investigation and apply a civil evasion penalty equal to the evaded VAT.

It’s important to be aware that HMRC has broad control over VAT, even though it’s unlikely that this will happen because you forgot to register. The necessity to pay back the VAT you owe as of the date you should have registered, even if you won’t be adding it to sales invoices during this time, is another issue that affects your cash flow.

You have the right to contest a VAT penalty within 30 days of being notified. By taking into account mitigating circumstances, HMRC may, in some cases, lower the fine.

Late VAT Payment

The penalty for paying beyond the deadline is 5% of the taxes owed.

HMRC might be willing to waive the fines for late filing, payment, and failure to notify provided a “strong cause.” But what constitutes “fair” behaviour?

Strong Defences Against Forgetting to Register for VAT

Did you know that HMRC may agree to waive the penalty above in certain circumstances?

These are classified as “reasonable reasons” and fall under unexpected events and uncontrollable situations. What legal justifications could there be for not registering for VAT?

As an example:

  • Your current serious illness or the bereavement of a close member
  • You’re genuinely unsure of your standing as a sole proprietor
  • There is a serious issue with HMRC’s online services

If you’ve made a mistake or violated the law in any way, dealing with HMRC could make you feel anxious. Make sure you seek support from VAT accountants in Manchester when this happens.


If you are a business owner in the UK, you must be aware of the consequences of not registering for VAT. Not registering for VAT can lead to significant financial penalties and an investigation by HMRC. If you are found to have deliberately avoided registering for VAT, you may be liable for a criminal offence.

It is advisable to seek professional advice from accountants in Bolton if you haven’t registered for VAT yet or have questions about how the system functions to avoid making any pricey errors. Keep an eye on your obligations because failing to file and pay your VAT on time could result in harsh fines.

Located in Bolton, Manchester, United Kingdom, Small enterprises choose YRF Accountants as their tax accountants. All of your personal and business tax concerns are handled by us. Speak to Bolton accountants today!