Value Added Tax Act 1994 section 59B

Relationship between sections 59 and 59A

Section 59B explains how the default surcharge rules interact when a VAT-registered person moves between the standard default surcharge regime (section 59) and the payments-on-account default surcharge regime (section 59A) during a surcharge period.

• When a payments-on-account period falls within a surcharge period triggered under the standard default surcharge rules (section 59), the payments-on-account surcharge rules (section 59A) apply to that period as though the surcharge period had been started or extended under section 59A.
• Conversely, when a standard accounting period falls within a surcharge period triggered under the payments-on-account rules (section 59A), the standard surcharge rules (section 59) apply to that period as though the surcharge period had been started or extended under section 59.
• In both cases, background questions — such as whether the surcharge period was validly begun or extended, or whether the person was in default during earlier periods — are determined under whichever surcharge regime originally created the surcharge period.
• A person is treated as having had outstanding VAT for a payments-on-account period if the total value of their defaults for that period was more than nil under section 59A.