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VAT surcharges

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Using VAT surcharges in Sage Accounting.


HMRC may impose a VAT surcharge when

  • A VAT return is not submitted and paid by the due date
  • A VAT Return is incomplete or incorrect

When this happens HMRC may impose a fine or recalculate the payment required. This is known as a VAT surcharge.

How it works

Record the amount of the VAT surcharge using journals. Then record the payment of the surcharge separately. To do this

  1. Create a new ledger account. This makes it easier to track any VAT surcharges on your financial reports. Record this as an overhead (expense) on your Profit and Loss, and as a current liability on your Balance Sheet.
  2. Enter a journal to record the amount of the surcharge.
  3. Record details of the payment to show when you've paid the surcharge.