If you receive a default surcharge notice, please let us know immediately.  There will not usually be a penalty charge on the first notice, but it is intended to warn you that you have not complied with the requirements.  If you pass on the notice we can explain the reason and you can ensure that following payments are on time. 

We had a case recently where a client had received surcharge notices on 3 occasions, but had not told us until the third one was issued.  The first was a warning with no penalty.  The second applied a 2% charge but as this was less than £400 HMRC’s practice is not to demand payment.  The third notice applied a 5% charge and this time the penalty was more than £400 so a demand was issued.  We were able to show that there was a good reason for the previous late payments and HMRC withdrew the charges.  However, had we had been told about the first notice, we could have advised the client to set up a Direct Debit which would have avoided the late payments and the distress caused by the penalty notice.