The Finance Act 2021 (Schedule 26 Second Penalty Assessments) (Appointed Day: Regulation Making Power) Regulations 2024
Overview
The Finance Act 2021 (Schedule 26 Second Penalty Assessments) (Appointed Day: Regulation Making Power) Regulations 2024 (the “Regulations”) have been made and laid before Parliament. The Regulations appoint 1 April 2025 as the appointed day for the coming into force of Schedule 26 to the Finance Act 2021 (Second Penalty Assessments for VAT).
Background
Schedule 26 to the Finance Act 2021 introduced a new power for HMRC to issue a second penalty for the same inaccuracy or default under the Value Added Tax Acts 1994 to 2018. The Regulations are necessary to bring Schedule 26 into force.
Key Provisions
The Regulations:
- Appoint 1 April 2025 as the appointed day for the coming into force of Schedule 26 to the Finance Act 2021.
- Provide that the power to make regulations under Schedule 26 may be exercised before the appointed day.
Impact
The Regulations will allow HMRC to issue a second penalty for the same inaccuracy or default under the Value Added Tax Acts 1994 to 2018 from 1 April 2025. This power is intended to deter taxpayers from making inaccurate or defaulting on their VAT obligations and to ensure that they pay the correct amount of VAT.
Next Steps
The Regulations are expected to come into force on 1 April 2024. HMRC will publish guidance on the operation of Schedule 26 in due course.
Additional Information
- The Finance Act 2021 (Schedule 26 Second Penalty Assessments) (Appointed Day: Regulation Making Power) Regulations 2024
- HMRC guidance on penalties for inaccurate VAT returns
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