HM Revenue and Customs (HMRC) record a ‘default’ if:
- they do not receive your VAT return by the deadline
- full payment for the VAT due on your return has not reached their account by the deadline
Surcharges
You may enter a 12-month ‘surcharge period’ if you default. If you default again during this time:
- the surcharge period is extended for a further 12 months
- you may have to pay an extra amount (a ‘surcharge’) on top of the VAT you owe
If you submit a late return, you will not have to pay a surcharge if you:
- pay your VAT in full by the deadline
- have no tax to pay
- are due a VAT repayment
HMRC will write to you explaining any surcharges you owe and what happens if you default again.
Source gov.uk
