It’s vital that businesses do all they can to make VAT payments on time. The payments themselves need to be made seven days after the month that follows your VAT period. If you do pay late, HMRC will either hand you a penalty or a surcharge liability notice. This depends whether you have missed your payment for the first time or have failed to pay on time on multiple occasions.
Surcharge Liability Notice
A Surcharge Liability Notice will be sent out to you if you haven’t made another late payment in the previous 12-month period.
Should you miss another deadline over the next twelve months, you will be penalised, with the penalty itself depending on the amount of your payments. Once you miss a deadline, you will stay in debt management until you have made three consecutive payments on time.
Are larger companies treated differently?
If a company has a turnover of more than £150,000, it will only be given a single ‘grace’ period where no surcharges are incurred.
Companies with smaller turnovers are offered assistance initially, being served a Surcharge Liability Notice the second time they default. HMRC are not known for their leniency when it comes to repeat late filings and payments.
Unless you have a very good excuse, you can expect to be met with a penalty. You won’t have to pay a surcharge for a late return if you don’t have any tax to pay, are due to receive a VAT repayment or pay your VAT in full by the deadline.
What if I can’t pay?
Should you find that you are unable to make a VAT payment on time, you should seek advice from a specialist right away. HMRC may suspect you are trading insolvently if you do fail to meet a deadline and could decide to carry out an audit.
Though you won’t be penalised for a first offence, you can expect to be met with charges if you continue to miss deadlines, with these penalties increasing the cost of doing business. The outcome is more likely to be positive if you do consult HMRC as soon as you suspect you won’t be able to make the payment.
There is no guarantee of this, but they may give you extra time to pay, or may enable you to make instalments through direct debit.
About One Click Group
At One Click Group, we provide first-class umbrella services for recruitment agencies and contractors. We have more than 20 years of experience in the contractor payroll sector and are able to provide a personal, professional service to each of our clients, ensuring all needs are met.
We do not operate a contact or call centre, with all our clients receiving assistance from their very own dedicated account manager. One Click Group has a close working relationship with bodies including PRISM, the Institute of Recruiters (IOR) and All Umbrella Companies Are Equal.
Learn more by sending a message to or calling 0345 557 1287.
Along with over 13 years experience in the contractor payroll industry, and after spending most of his working life as a financial advisor in the regulated financial services industry, Mike has garnered an extensive network of contacts in the recruitment industry, many of whom trust both him and the One Click Group to handle their accounting. Mike has also been a member of various industry bodies throughout the years, such as the British Institute of Recruiters, in order to champion best practices across the contractor payroll industry.