V5.371 Default Surcharge—Liability To Surcharge (Before 1 January 2023)

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Commentary

Part V5 Compliance, enforcement and appeals

V5.371 Default surcharge—liability to surcharge (before 1 January 2023)

This paragraph covers the liability to a surcharge under the default surcharge. The default surcharge applies to accounting periods starting before 1 January 2023. This paragraph therefore deals only with those periods.

For penalties for late payment of tax and late submission of VAT returns for periods starting on or after 1 January 2023, please refer to V5.302B and V5.302C.

Circumstances under which liability to surcharge arises

A taxable person is liable to default surcharge if¹:

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(1)�� he has been served with a surcharge liability notice²
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(2)�� he is in default³ in respect of a prescribed accounting period ending within a surcharge period⁴ specified in, or extended by, the surcharge liability notice, and
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(3)�� has outstanding VAT for that prescribed accounting period⁵

Where the VAT registration number has been transferred in the circumstances set out in V2.131, any default history of the transferor is not carried forward to the

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