Value Added Tax Act 1994 section 27

Default surcharge: notice of special surcharge period

Section 27 sets out when a person using the One Stop Shop (OSS) scheme is considered to be in default on their VAT obligations, and explains the special surcharge period that HMRC can impose as a consequence.

• A person is in default if their OSS or relevant non-UK return is not received by the deadline and a reminder has been issued, or if the return is received on time but the VAT shown as due remains unpaid and a reminder has been issued.
• HMRC may serve a special surcharge liability notice on a person in default, opening a special surcharge period that runs from the date of the notice until the first anniversary of the last day of the tax period in question.
• If a further default occurs during an existing special surcharge period, the new notice extends the existing period rather than creating a separate one — the two are treated as a single continuous special surcharge period.
• The reminders referred to must be issued in accordance with Article 60a of the EU Implementing Regulation, whether by HMRC or by the tax authorities of the administering member state.