What happens if you submit your VAT201 late

The two things that get charged

A late or unpaid VAT201 exposes you to two separate amounts, and they are calculated differently:

• →A late payment penalty of 10% of the outstanding VAT amount, charged once, immediately, the moment the payment is late. It does not grow the longer you stay late, it is a flat 10% from day one.
• →Interest at the prescribed rate set by the Minister of Finance (linked to the repo rate and adjusted periodically), charged daily on whatever remains unpaid, for as long as it remains unpaid. Unlike the penalty, interest keeps accruing the longer the debt sits open.

Both apply whether you submitted the return late, submitted on time but paid late, or did both. Submitting the VAT201 on time but paying a day after the 25th still triggers the 10% penalty on the amount paid late.

A worked example

Say your VAT201 for a two-month period shows R20,000 owing to SARS, and the payment reaches SARS 45 days after the 25th due date.

The penalty alone adds R2,000 regardless of whether the payment is 1 day or 100 days late. The interest component is what actually punishes delay, since it compounds with every day the R20,000 (or whatever remains of it) stays unpaid.

What if you cannot pay the full amount

Submit the VAT201 on time regardless, even if you cannot pay in full. Submitting late and paying late are treated as separate failures, and a late submission can additionally trigger administrative non-compliance penalties on top of the payment penalty and interest. Filing on time, then paying what you can and the balance shortly after, at least avoids stacking a submission penalty on top of a payment one.

Getting the penalty remitted

SARS can remit (cancel or reduce) the 10% late payment penalty if you request remission through SARS eFiling and can show "reasonable grounds": something like a first incident after a consistently good compliance history, a system outage on SARS's own side, serious illness, or another circumstance genuinely outside your control. A request made because the deadline was simply forgotten is unlikely to succeed. Interest is almost never remitted, since it is treated as compensation to the fiscus for the use of money you owed it, not a punishment.

Request remission as soon as possible after the penalty is raised. SARS eFiling has a dedicated "Request for Remission" option against the specific assessment, and a request lodged promptly, with supporting documents attached where relevant, has a better chance than one lodged months later.

Avoiding the date sneaking up on you

The VAT201 due date is the 25th of the month after each two-month VAT period ends, a fixed date that does not move for weekends in the way some other SARS deadlines do (eFiling users get a small extension to the last business day, but it is easy to miscalculate which day that actually is). Rather than tracking that manually, our Compliance Calendar computes your next VAT201 due date automatically from your VAT number and shows it in the "Due within 30 days" group once it gets close, using the same period math as our VAT Return Summary. It is a free tool on every plan, no upgrade required.

Sources

• ↗SARS: Value-Added Tax
• ↗SARS: Interest and Penalties

Disclaimer: This article is for general information and does not constitute tax, accounting, or legal advice. Penalty and interest rules, and the prescribed interest rate itself, change from time to time. Always confirm your specific position, and any remission request, through SARS eFiling or with a registered tax practitioner or accountant.