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HMRC internal manual

Compliance Handbook

Penalties for failure to notify: in what circumstances is a penalty payable: single obligation to notify - exceptions

In certain circumstances a trader may need to tell us about their liability to be registered for VAT more than once, for example if HMRC incorrectly cancels a registration. In this scenario there is a new obligation to notify so the penalty provisions in FA08/Sch41 will apply where there has been a failure to notify on or after 1 April 2010.


‘X’ provided inaccurate information to HMRC that indicated that he was no longer liable to be registered for VAT because his turnover was below the threshold. On the basis of this information HMRC deregistered ‘X’. HMRC subsequently established that the information provided was incorrect and ‘X’ should have remained registered for VAT. HMRC will re-register ‘X’ but there is also a new obligation to notify so ‘X’ will be liable to a failure to notify penalty.

The date that the obligation to notify arises is dependent on the circumstances of the case.