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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Belated Notification Penalty: Time limits for assessing a penalty: Belated notification penalty time 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Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008.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.

Once an event gives rise to a belated notification penalty (BNP), a BNP assessment can be raised within a period up to twenty years from the date of that event where there is a loss of VAT attributable to a failure to comply with a notification obligation.

Where there is no loss of VAT attributable to a failure to comply with a notification obligation a BNP assessment must be raised within 4 years from the date of the event that gives rise to the penalty.

If the relevant VAT in the penalty period is nil or if a repayment is due there is liability to a £50 deminimis penalty; this must be issued within 4 years of the date of the event that gives rise to the penalty. Because failure to notify is a continuing failure, you must determine the last date at which the trader failed to notify HMRC. This date will be the date that gives rise to the penalty

The date giving rise to the penalty is therefore to be taken as the day before HMRC are notified of the requirements to register or notify a material change or alteration.

Note: This is confirmed in the Customs v Shingleton [1988] STC 190 case

In practice the penalty should be raised within a reasonable period of establishing the liability for the penalty

Please see VCP10422 for the penalty assessment procedures when a person dies.