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ACCA Strategic Professional · Advanced Taxation (UK) · Value added tax

Zenith Ltd, a UK VAT-registered company, paid £48,000 of VAT due for a quarter 12 days after the due date. Using the late payment penalty rates in the ATX-UK tax tables, what is the late payment penalty for this payment?

No late payment penalty arises. Under the ATX-UK table, VAT paid up to 15 days after the due date incurs no penalty, and twelve days falls within that band. The 3% penalty only starts when the payment is 16 to 30 days late.

  1. ANil, because the payment was no more than 15 days lateCorrect
  2. B£1,440, being 3% of the VAT
  3. C£2,880, being 6% of the VAT
  4. D£48, being a daily penalty at 10% a year

Explanation

A payment up to 15 days late attracts no penalty under the late payment table. Twelve days is within that band, so the penalty is nil. The 3% charge (£1,440) applies only if the payment is 16 to 30 days late.

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