Value Added Tax Act 1994 section 29

Default surcharge: exceptions for reasonable excuse etc.

Section 29 of Schedule 9ZD sets out the circumstances in which a person can avoid a default surcharge by demonstrating a reasonable excuse or showing that their return or payment was despatched in good time.

• A surcharge can be avoided if the person can show the return or payment was despatched in time and in a manner where it would reasonably be expected to arrive before the deadline, or that there was a reasonable excuse for the late despatch.
• Where the excuse is accepted, the person is treated as never having been in default for that period, and any special surcharge liability notice that depended on that default is treated as never having been served.
• A default is only "material" to a surcharge if it directly triggered the surcharge or was relied upon to issue the special surcharge liability notice, provided the person had not already incurred a surcharge within the relevant surcharge period.
• A default is disregarded entirely if it also constitutes a breach of regulatory provisions for which a penalty has already been imposed, or if the Commissioners (after consulting the Treasury) direct that a particular default should be left out of account.