This guidance note provides an overview of the default surcharge regime and when it will be applied. The default surcharge can be applied when a business submits its VAT return and / or payment after the due date.

The default surcharge has been replaced by a revised penalty regime for failure to submit a VAT return by the due date and for late payment of VAT for periods beginning on or after 1 January 2023. See the Penalties ― late submission and failure to submit returns and Penalties ― late payment of VAT guidance notes for more information.

This guidance note therefore deals only with the rules as they apply to periods beginning before 1 January 2023.

For further guidance see also HMRC’s VAT Default Surcharge Officer’s Guide at VDSOG100 and Notice 700/50. For in depth commentary, see De Voil Indirect Tax Service V5.371.