Consequence of Default

You will be alerted after the first default – Surcharge Liability Notice (SLN). Do not ignore this notice. If you fail to pay VAT on the due date in the next five quarters, the surcharge will be 2% of the outstanding tax. The surcharge for the subsequent default will increase to 5% and increase by 5% to a maximum of 15%. Low rate (2% and 5%) surcharge assessment will not be issued for less than £ 400. Additional charge liability at 10% and 15% rates is subject to a minimum of £ 30. Whether submitted late or paid late, each default increases the surcharge liability period, while late payment only imposes a surcharge.