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HMRC internal manual

Self Assessment Manual

Interest, penalties and surcharge: surcharge: introduction

This guidance applies to 2009-10 and earlier. Different rules apply to 2010-11 and later tax years. Guidance regarding tax years 2010-11 onwards can be found under SAM61200 onwards.

Surcharge is intended to encourage prompt payment and is imposed only on late payment of tax and NIC liabilities (referred to throughout as tax). It is not charged on unpaid interest and penalties, on surcharge itself nor on payments on account). But, if any part of a payment on account is outstanding at the balancing payment due date, that outstanding sum will be liable to surcharge.

Surcharge may be imposed in two stages

  • An initial surcharge on any tax outstanding more than 28 days after the due date
  • An additional surcharge on any tax outstanding more than six months after the due date

Both initial and further surcharge are charged at a rate of 5 per cent of the outstanding tax.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Taxpayers receive a formal notice (SA324) advising them of surcharge. An appeal can be made within 30 days from the date of issue of the notice.

Note: Five extra days, over and above the 30 days described in the legislation, are allowed for payment and appeal against surcharge. The extra days take account of the delay between raising a surcharge and the expected or deemed date of issue of the surcharge notice. For this reason the date surcharge was imposed as shown on the SA record, and the date of issue of the surcharge notice, differ.

Interest is chargeable on late paid surcharge.