If a business submits two late VAT returns but pays all due amounts on time, what is the outcome?

Submitting late VAT returns, while ensuring that all due payments are made on time, often allows a business to avoid penalties or surcharges. This is primarily because the UK's Value Added Tax (VAT) rules often focus on the timeliness of payment rather than just the submission of returns.

When a business pays its VAT liability in full by the due date, it demonstrates compliance regarding payment obligations, which is a critical factor in the VAT compliance framework. Although there may be a technical breach regarding the timeliness of the return submissions, the act of paying on time can mitigate harsher penalties, such as surcharges that are usually assessed for late payments.

Generally, if this pattern of behavior continues without escalating issues or repeat offenses, VAT compliance checks may yield more lenient scrutiny in future returns as long as the business maintains prompt payments. Thus, submitting returns late, accompanied by timely payments, typically results in no surcharge being due.