There have been a couple of recent cases that highlight the importance of filing and paying VAT on time. Both cases were argued on proportionality.
Blue Ocean Associates Ltd v Revenue and Customs (VAT – PENALTIES : Default surcharge)  UKFTT 42 (TC) (26 January 2016)
VALUE ADDED TAX – default surcharge – return submitted one day late – with a penalty of £277,185.00 proportionate – yes
As the default which is the subject of the present appeal was the first such default by the Company in the surcharge period, the surcharge fell to be calculated at the rate of 2% on the amount which was paid late (£13,859,254.00) and was therefore £277,185.00.
Trinity Mirror PLC v Revenue & Customs  UKFTT 355 (TC) (14 April 2014)
VAT – default surcharge – whether penalty proportionate – appeal allowed
In respect of the 06/07 VAT Period, Trinity Mirror was required to (1) make 2 payments on account of £1,546,965.00 each by, respectively, 31/05/2007 and 29/06/2007, and (2) file its VAT return and make a balancing payment of £5,467,130.92 by 01/08/2007. Trinity Mirror made the 2 payments on account, and filed its VAT return, on time. It made the balancing payment in full on 02/08/2007, that is, 1 day late.
The Penalty was £70,906.44
Its pretty clear from both cases that HMRC are getting tough on late returns and payments so its vital that businesses don’t miss deadlines!