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The VAT penalties regime has had substantial changes with effect from 01 January 2023 and it is important for community pharmacy business owners to take note as this is a crucial cash inflow for most. Below we explore the changes that will impact all VAT registered community pharmacy businesses. Old regime Prior to 01 January 2023, VAT registered businesses that failed to file their VAT returns or pay any VAT liabilities would be subject to the default surcharge regime. There would be no surcharge for NIL or repayment VAT returns which would apply to most community pharmacy businesses. New regime For VAT periods starting on or after 01 January 2023, the default surcharge will be replaced by a new VAT penalties and interest regime if you submit your VAT returns late or pay your VAT liability late. If you pay your VAT monthly or quarterly, the deadline for filing your VAT return and paying any VAT liabilities is one calendar month and 7 days after the end of the respective period. For example, if you are filing the VAT return for the month or quarter ended 30 June 2022, the deadline for filing will be 07 August 2022. The liability must also be paid and cleared by that date.