V5.373 Surcharge liability notice

V5.373 Surcharge liability notice

General

HMRC are empowered to serve a surcharge liability notice (“SLN”) where a taxable person is in default in respect of a prescribed accounting period1. There appears to be no requirement for HMRC to serve an SLN. In Notice 700/50/19 (August 2019) para 5.1, it is implied that HMRC will not issue an SLN where the default does not involve a late payment—

“There's no liability to surcharge if you:

  1.  

    •     submit a nil or repayment return late

  2.  

    •     pay the VAT due on time but submit your return late

We won't issue a surcharge in these circumstances because there's no late payment involved. If you defaulted previously we'll issue you with a Surcharge Liability Notice Extension extending the surcharge period because the return is late, but we won't increase the rate of surcharge.

You'll only enter the surcharge system if you pay late.”

On the other hand, the notice also states (para 4.1)—

Each time you default we'll send you either a—

  1.  

    •     Surcharge Liability Notice

  2.  

    •     Surcharge Liability Notice Extension

An SLN is deemed to have been served if it is posted in a prepaid envelope properly addressed to the trader at his last or usual residence or place of business. Unless the contrary is proved, an SLN is deemed to be served at the time when the envelope would be delivered in the ordinary course of post. The “contrary is proved” if a person

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