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HMRC internal manual

VAT Default Surcharge Officer's Guide

From
HM Revenue & Customs
Updated
, see all updates

Default within the surcharge period

If a taxpayer defaults (files a return or pays late) within the surcharge period, the surcharge period is extended.

For example: Mr Smith files his return for 03/16 late. A Surcharge Liability Extension Notice is issued to Mr Smith. The notice tells Mr Smith that his surcharge period has been extended until 31 March 2016.

If a taxpayer pays a return late during a surcharge period they may be charged an extra amount known as a surcharge. The surcharge is calculated as a percentage of the VAT paid late. The rates of surcharge are:

  • 2% of the amount of VAT paid late for the first late payment
  • 5% of the amount of VAT paid late for the second late payment
  • 10% of the amount of VAT paid late for the third late payment
  • 15% of the amount of VAT paid late for the fourth and subsequent late payments.

Note: A surcharge is not charged at the 2% and 5% rates if it is for less than £400. There is a minimum surcharge of £30 charged at the 10% and 15% rates.