The VAT default surcharge was HMRC's old penalty system for late VAT returns or payments, based on a escalating percentage of the VAT owed for repeated defaults within a 12-month surcharge period.
Replaced by the new penalty points system
Since 2023, late VAT submissions incur points rather than an automatic surcharge, with a financial penalty only once a points threshold is reached, and separate interest applies to late payments.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.