Defining the VAT Default Surcharge notice
HMRC imposes a Default Surcharge as a civil penalty to “encourage” firms to file their VAT forms and pay the tax owing on time.
By law, VAT-registered firms must file their returns and make the necessary VAT payments by the due date.
If HMRC does not receive your return and all of the VAT owed by the due date, you will be in default.
The relevant date is when cleared monies are received in HMRC’s bank account. Payment must be paid on the previous working day if the due date is not a working day.Get a Quote Now
Is it true that a VAT surcharge is a penalty?
There is presently no separate penalty for late VAT filing. Instead, the Default Surcharge, which is a combination of late submission & late payment penalties, is applied. The taxpayer receives a Surcharge Liability Notice for the first late return, which is valid for a year.
What happens if you fail to file your VAT return?
You’ll face more than a late payment penalty if you don’t file your VAT return to HMRC on time. You’ll have to pay interest on it until it’s paid off.
You may, however, get a Surcharge Liability Notice based on your prior VAT payment history (SLN)Subscribe Now
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What is the penalty for paying VAT late?
If your VAT Return is incorrect, HMRC can levy you a penalty (ranging from 15% to 100% of the outstanding amount owing).
How do I write an HMRC dispute letter?
Write to HMRC and explain why you believe the amount you must pay should be revised, as well as how the additional evidence supports your position. Send your message to the address on the letter from HMRC stating that your repayment will not be changed. Any new evidence should be photocopied.
Is it possible to submit my VAT return late?
If you file a late return and pay your VAT in full by the deadline, you will not be charged a penalty. I don’t have to pay any taxes.
are owed a VAT refund
What does “fair excuse” imply?
You will not be charged a fee if you have a reasonable justification for not paying on time and correct the problem before the excuse expires.
Because there is no legal term of reasonable excuse, the facts of your case will decide it.
A reasonable excuse is anything that prevented you from completing a tax obligation on time, notwithstanding your best efforts.
The existence of a valid justification is determined by the specific circumstances surrounding the failure.
Reconsiderations and appeals
If you disagree with our conclusion that you are subject to a surcharge or the method used to compute the fee, you may:
• Request a review of your case from us.
• Have your case considered by a tax tribunal that is independent of the IRS
If you want us to look into your case, you must write to us within 30 days after receiving the Surcharge Liability Notice Extension, explaining why you disagree with our judgment.
You are not required to write to us. An accountant or adviser can do this for you if you have permitted us to act on your behalf.
You might, for example, request that we examine the default if you believe that:
• We applied the erroneous rate of surcharge.
• The wrong amount of VAT was utilized when computing the surcharge.
• There are extraordinary circumstances that warrant the default being removed.
If you disagree with the conclusion of our review, you can still appeal to the tribunal.
Gm professional accountants are small business accountants based in , Wimbledon, Birmingham, Canary Wharf (London)