In this section:
- How to pay VAT due to HM Revenue & Customs
- Getting a VAT refund from HM Revenue & Customs
- VAT filing and payment deadlines
- Missed VAT deadlines: penalties and surcharges
- What to do if you cannot pay the VAT due to HM Revenue & Customs
Missed VAT deadlines: penalties and surcharges
You must file your VAT return and pay any VAT you owe by the due date. If you don't, you may be surcharged a percentage of your unpaid VAT. If you continue to file or pay late, you will be charged a higher percentage of your unpaid VAT.
This guide explains what happens if you miss VAT filing and payment deadlines and what you should do to avoid financial penalties. If you have difficulty paying your VAT, you should still send in your VAT return on time and then contact HM Revenue & Customs (HMRC) about your payment problems.
On this page:
- Surcharges if you miss VAT return filing or VAT payment deadlines
- When you will not be surcharged for late filing or late payment
- Appealing against a surcharge
- What to do if you are having trouble paying VAT
- More useful links
Surcharges if you miss VAT return filing or VAT payment deadlines
You must file your VAT return and pay any VAT by the due date. If HMRC receives your VAT return or VAT payment after the due date, you are 'in default' and may have to pay a surcharge in addition to the VAT that you owe.
Find out about VAT filing and payment deadlines
The first time you default, you will be sent a warning known as a 'Surcharge Liability Notice'. This tells you that if you pay late ('default') again during the following 12 months - known as your surcharge period - you may be charged a surcharge.
If you file or pay late again during your surcharge period you may have to pay a 'default surcharge'. This is a percentage of your unpaid VAT. If you don't file a correct VAT return, we will estimate the amount of VAT you owe and base your surcharge on that amount (known as an assessment).
Your first surcharge will be 2 per cent of your unpaid VAT.
You will be sent a 'Surcharge Liability Notice Extension' that extends your surcharge period for an additional 12 months. Each time you do not file or pay your VAT on time, your surcharge period will be extended for a further 12 months.
If you continue to make late payments you will be charged increasing penalties of 5 per cent, 10 per cent and 15 per cent of your unpaid VAT. If you continue to fail to submit a correct VAT return we may increase the estimated amount of VAT you owe us and base the increased penalties on that amount.
Find out what can happen if you persistently file or pay your VAT late
When you will not be surcharged for late VAT return filing or late payment of VAT
You will not be surcharged for late filing and/or late payment if:
- you file a nil return late (ie, where you have not charged VAT nor paid VAT)
- you file a return late when you are due a VAT repayment
- you file a return late when you have paid your VAT on time
However, we will record a default and issue a surcharge liability notice extension to extend your surcharge period because of the late return, but we won’t increase the rate of surcharge.
If you file a return late or pay late for the first time and your turnover is less than £150,000 a year, you will not be surcharged, but will receive a letter offering help and support. If you default again within 12 months you will formally enter the default surcharge system.
If you have what HMRC may accept as a reasonable excuse in your particular circumstances such as a computer breakdown, loss of records or illness, you will not be surcharged, and we won’t either extend your surcharge period or increase the rate of surcharge.
More about what we consider to be a reasonable excuse in VAT Notice 700/50
You also won't be charged a penalty if you are being charged at the 2 per cent or 5 per cent rate and we calculated the surcharge to be less than £400. We will, however, record a default, issue a surcharge liability notice and increase the rate of surcharge if you default again within the surcharge period.
Appealing against a surcharge
If you think you should not have been surcharged, or if you think that the amount you have been surcharged is too high, you can ask HMRC to take another look at the charges and/or your 'default liability'. You must do this within 30 days of receiving your surcharge notice or extension. You can also appeal against the surcharge or the default liability to a VAT tribunal.
Contact us to ask us to reconsider a surcharge
Find out how to appeal against decisions made by us about your VAT affairs
What to do if you are having trouble paying VAT
If you have difficulty paying your VAT, you should still send in your VAT return on time and then contact HMRC about your payment problems.
What to do if you have trouble paying VAT
Find out how to contact us if you have a payment problem
More useful links
Read more about what to do if you can’t pay the VAT you owe us
