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HMRC internal manual

VAT Default Surcharge Officer's Guide

From
HM Revenue & Customs
Updated
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Surcharge period

Taxpayer’s turnover is less than £150,000 a year

A letter offering help and support is sent to the taxpayer the first time they pay late within any 12 month period.

A Surcharge Liability Notice is sent to the taxpayer if they pay late again within 12 months of their first default.

For example: Mr Jones pays the return for the 06/16 accounting period late and an automatic letter offering help and support is issued on 9 August 2016. A Surcharge Liability Notice will be issued to Mr Jones’ if he pays late in respect of an accounting period ending between 9 August 2016 and 30 June 2017.

Taxpayer’s turnover is £150,000 or more a year

A Surcharge Liability Notice is sent to the taxpayer the first time they pay late within any 12 month period. This notice explains that the taxpayer may be liable to a surcharge if they default again during what is called the ‘surcharge period’. The surcharge period begins on the date of the notice and ends 12 months from the end of the accounting period in default.

For example:

Accounting period in default Surcharge Liability Notice issued Surcharge period
06/16 9 October 2016 9 October 2016 to 30 June 2017

Note: In the example the taxpayer cannot be surcharged if their 09/16 payment is late. This is because the accounting period end date for 09/16 is after the start of the surcharge period. The first accounting period that may be liable to a surcharge is 12/16.