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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Belated Notification Penalty: When Does A Penalty Arise: Exceeding turnover limits

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008. The Failure to Notify penalty applies to obligations to notify HMRC of a liability to be registered for VAT on or after 01/04/2010. The Belated Notification Penalty under Section 67 VATA 1994 continues to apply to obligations to notify a liability to be registered for VAT before 01/04/2010.

Please see the Compliance Handbook CH70000 for more details about the new failure to notify penalty.

A trader will become liable to register for VAT once their turnover exceeds or will exceed the statutory limits.

From 25 July 1985 if a trader becomes liable to VAT registration based on the last 12 months trading (the backward look), they must notify HMRC within 30 days of the end of the relevant month in accordance with the VAT Act 1994, Schedule 1, paragraphs 1(1) 5 and 6.

A trader liable for registration to VAT on an estimate of the trading in the next 30 days (the forward look) must notify HMRC within 30 days of the date he first expected to exceed the registration limit.

Note: Guidance on registration can be found in V1-28 Registration.

If the trader does not comply with these time limits they will be liable to a belated notification penalty.