Value Added Tax Act 1994 section 28

Further default after service of notice

Section 28 sets out the escalating surcharges that apply when a person who has already been served with a special surcharge liability notice continues to default on paying their special scheme VAT during the surcharge period.

• A person who defaults on special scheme VAT payments during a special surcharge period will be charged a surcharge of £30 or a percentage of the outstanding VAT, whichever is greater.
• The surcharge percentage escalates with each successive default: 2% for the first period, 5% for the second, 10% for the third, and 15% for every period thereafter.
• Special scheme VAT is VAT owed on scheme supplies treated as made in the United Kingdom, payable either to HMRC under the UK scheme or to the tax authorities of the administering member state under a non-UK scheme.
• Special scheme VAT is considered outstanding if it remains unpaid by the deadline for submitting the relevant OSS scheme return or non-UK return for that tax period.