This paragraph covers the concept and calculation of the surcharge in connection with 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, see V5.302B and V5.302C.
Calculation of surcharge
A taxable person is liable to default surcharge if they are in default in respect of a prescribed accounting period ending within a surcharge period specified in, or extended by, a surcharge liability notice1.
The amount of the surcharge is the greater of £30 and the 'specified percentage' of the 'outstanding VAT' for the prescribed accounting period concerned2.
'Outstanding VAT' is tax for the prescribed accounting period of default unpaid by the due date3. It means tax due to have been paid, not necessarily the liability as stated on the return4. There is no 'outstanding VAT' if
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 15:18