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HMRC internal manual

VAT Civil Penalties

Belated Notification Penalty: Reasonable excuse: Turnover calculations and limits

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

Tribunals have not in the past found a trader’s ignorance of the basic turnover limits as grounds for reasonable excuse, see VCP10437.

However, if the calculation of turnover includes complex liability questions there may be grounds for mitigation, see VCP10445 or in exceptional circumstances reasonable excuse.

In the St Benedict’s School case, the school turnover, which normally only consisted of sales by the school shop, exceeded the registration limit because of the monies from tickets sold for the school play.

The school had regarded the holding of the school play as supplies of education made by the school as agent for the Local Authority. The Tribunal held that in view of the complexity of the case the school had a reasonable excuse for its failure to register.