Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

VAT Civil Penalties

HM Revenue & Customs
, see all updates

Default Surcharge: Calculation and notification of the surcharge: Rates of surcharge

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

The maximum rate of surcharge is 15%.

The minimum amount of surcharge

  • where a liability to surcharge is established no surcharge assessment will be issued if



  • the amount calculated is less than £400 (or £200 for returns due before 31 December 2001), and
  • it is calculated at the 2% or 5% rates


  • at the 10% and 15% rates, the amount to be assessed will be the greater of



  • the calculated amount, or
  • £30.
Surcharge rate Surcharge amount Amount notified to trader
2% £400 £400
5% £399 None *
10% £16 £30
15% £31 £31

Although the trader has incurred a liability to Surcharge of 5%, no surcharge assessmentis issued because the calculated surcharge amount is less than £400.

However, a Surcharge Liability Note Extension (SLNE) is issued and a further defaultwithin the surcharge period will incur a liability to Surcharge of 10%.

In this way, a trader can escalate to the 10% rate without having been surchargedpreviously. He will, however, have received one SLN and two SLNE’s warning of theconsequences of further defaults.