Whenever a default (either late payment or return) occurs within
the period covered by a SLN, a Surcharge Liability Notice Extension
(SLNE) is issued to the trader. The legal basis for this is Section
59 (3) VAT Act 1994, or for POA traders Section 59A (3) VAT Act
1994.
The SLNE extends the period of liability to surcharge until
12 months from the last day of the latest accounting period in
default. A surcharge assessment may also be issued with a SLNE.
The following is an example of how this works
| 09/02 | 1st default. A SLN is issued. The Surcharge Liability Period commences on the date of issue and ends on 30 September 2003. |
| 09/03 | 2nd default. The surcharge period is extended to 30 September 2004. |
Surcharge Liability Notice (SLN) - Issued at the first payment
default to set the surcharge liability period.
VAT 161 (A&B) Surcharge Liability Notice
Extension (SLNE) - Issued on first or subsequent default (either
late return and/or payment) within a surcharge period where no
surcharge has been assessed (such as a late return or where the
surcharge calculated at the 2% or 5% rates is less than £400).
VAT 162 (A&B) Surcharge Assessment and
Surcharge Liability Notice Extension - Issued on the first or
subsequent default within a surcharge period, to advise the amount
of surcharge due and to extend the surcharge liability period.
VAT 163 (A & B) Supplementary Assessment of
Surcharge - Issued to advise of an increase in a previously issued
surcharge assessment.
VAT 163 C Advice of Reduction of Surcharge -
Issued to advise a reduction in a previously issued surcharge
assessment.
VAT 164 (A) Tax Assessment and Surcharge Liability
Notice Extension - Issued to advise an assessment of tax and to
extend the surcharge liability period.
VAT 165 (A) Tax Assessment and Surcharge Liability
Notice - Issued at the first default to advise an assessment of tax
and a surcharge liability period.
VAT 166 (A&B) Tax Assessment and Surcharge
Liability Notice Extension - Issued to advise an assessment of tax
and surcharge and to extend the surcharge period.
VAT 172 (A&B) Known as the Default Surcharge
Help Letter - Issued to businesses with a turnover of up to
£150,000 at the first payment default. This is not a legal
surcharge document, but simply a notification of a default, an
offer of help and advice that there will be consequences if tax is
not paid or if there are further defaults.
VAT 173 (A) Help Letter and Tax Assessment -
Issued to businesses with a turnover of up to £150,000 at the
first payment default and combines a help letter and assessment of
tax.
