You usually submit a VAT Return to HM Revenue and Customs (HMRC) every 3 months. This period of time is known as your ‘accounting period.’ The VAT Return records things for the accounting period like:
You must submit a VAT Return even if you have no VAT to pay or reclaim. HMRC record a ‘default’ if:
You may enter a 12-month ‘surcharge period’ if you default. If you default again during this time:
HM Revenue and Customs (HMRC) will write to you explaining any surcharges you owe and what happens if you default again.
How much you pay
Your surcharge is a percentage of the VAT outstanding on the due date for the accounting period that is in default. The surcharge rate increases every time you default again in a surcharge period.
This table shows how much you’ll be charged if you default within a surcharge period.
You don’t pay a surcharge for your first default.
|Defaults within 12 months||Surcharge if annual turnover is less than £150,000||Surcharge if annual turnover is £150,000 or more|
|2nd||No surcharge||2% (no surcharge if this is less than £400)|
|3rd||2% (no surcharge if this is less than £400)||5% (no surcharge if this is less than £400)|
|4th||5% (no surcharge if this is less than £400)||10% or £30 (whichever is more)|
|5th||10% or £30 (whichever is more)||15% or £30 (whichever is more)|
|6 or more||15% or £30 (whichever is more)||15% or £30 (whichever is more)|
There’s no surcharge if you submit a late VAT Return and:
HMRC can charge you a penalty of up to: