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HMRC internal manual

Compliance Handbook

Penalties for Failure to Notify: In what circumstances is a penalty payable: What is failure to notify

In this guidance ‘failure to notify’ means that a person has not complied with one of the relevant obligations listed in CH71300 on or before the appropriate date. For example, the person has not told us

  • that they are liable to pay a particular tax, or
  • that they are liable to register for a particular tax, or
  • of a specified change in circumstances for a particular tax, or
  • that they intend to carry out certain taxable activities.

Depending upon the type of activity and the type of notice required the law fixes the time within which the person must notify us or fail to meet the obligation. See CH71240 for the time at which the failure occurs.


  1. Notifying liability to income tax

Harbin started in business on 15 August 2011. His profit for the period to 5 April 2012 was £18,750. Harbin must notify us that he is liable to income tax for 2011-12 on or before 5 October 2012.

  1. Notifying liability to be registered for VAT

Harbin’s annual turnover passes the VAT registration threshold for the first time on 30 April 2013. He must tell us that he is liable to be registered for VAT on or before 30 May 2013.

  1. Notifying chargeability to corporation tax

Shane is the UK representative of ABC (Australia) Ltd. He has spent two years assessing whether the company should expand its operations into the UK. Shane is on the Australian payroll and there are no UK employees. As the company is not trading in the UK and has no UK employees it does not have any obligations to meet.

In January 2011 ABC (Australia) Ltd opens a branch in Bristol employing call centre staff, salesmen and Shane as the managing director. Its first accounts for the period to 30 June 2011 show taxable profits of £75,250. The company must notify us that it is chargeable to corporation tax on or before 30 June 2012.