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ACCA Strategic Professional · Advanced Taxation (UK) · Tax administration and the UK tax system

Harlow Ltd's VAT of £30,000 for a quarter was paid 10 days after the due date. Which statement correctly describes the late payment position under the ATX-UK tax tables?

No late payment penalty applies. The tables provide that payments up to 15 days late attract no penalty, and Harlow Ltd paid 10 days late. The 3% penalty begins only when payment is 16 to 30 days late.

  1. AA 3% penalty of £900 applies because the payment was late
  2. BNo late payment penalty applies because the payment was up to 15 days lateCorrect
  3. CA 6% penalty of £1,800 applies from the first day of lateness
  4. DOnly interest at 8.50% applies, and no penalty can be charged

Explanation

The penalty table shows no penalty where payment is up to 15 days late. Ten days falls within that band, so no penalty arises. The 3% charge only starts at 16 days late.

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