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HMRC internal manual

VAT Civil Penalties

Belated Notification Penalty: Belated Notification forms and letters: Letter 5

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008.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.

Correction of the EDR to an earlier date

‘Personal and Confidential’

On the basis of your notification on Form VAT 1 dated … you were registered for VAT with effect from ….

It now appears, however, (indicate how the incorrect registration date was discovered) that you were required to notify and be registered with effect from …. It is therefore necessary to correct your registration particulars and an amended Certificate of Registration advising you that your effective date of registration is … will be sent to you. You are required to account for and pay tax on all taxable supplies made by you between this date and the date of registration previously advised to you on the original certificate of registration.

*Use the following paragraph if the trader has not already received first return:

[Your first tax return will now cover the period from … to …]

*Use the following paragraph if the trader needs to complete a manual return:

[The Commissioners direct that you furnish a return on the enclosed VAT 100 for the period (from correct effective date to day prior to original effective date) not later than (one month from date of letter) and you should at that time pay the amount of tax shown by the return to be due. A reply paid envelope is enclosed for this purpose.]

  • Use the following paragraph if a penalty is appropriate and the liability is known:

[Because of your failure to notify your liability to registration at the proper time you have rendered yourself liable to a penalty. Details of the penalty and the instructions for payment etc are set out in the penalty assessment Form VAT 291 enclosed.]

*Use the following paragraphs if a penalty is appropriate and the liability is not known:

*[Because of your failure to notify your liability to registration at the proper time you have rendered yourself liable to a penalty under Section 67(1) of the VAT Act 1994 at a rate of (insert appropriate rate) of your net tax liability for the period from … to …, or £50, if greater or where there is no tax liability. You should notify this office, within 30 days of the date of this letter using the return paid envelope enclosed, of your net tax liability (output tax less input tax) for this period. Information about output tax and input tax can be found in Notice 700/15 - Ins and Outs of VAT and in Notice 700 - The VAT Guide already issued to you. When calculating the net tax due (relevant VAT) for the penalty, if you are required to account for any distance sales or acquisitions, for each acquisition and/or distance sale you have made you may deduct the VAT paid in another Member State up to the amount of UK VAT due on that supply. The VAT on the distance sales and/or acquisitions must be accounted for on the normal basis when completing your VAT return.

If this information is not provided as requested HMRC will, under the powers conferred on them by Section 76(1) of the Act, assess you for a penalty based on the best evidence of your net tax liability available to them.]

If you disagree with a decision made by HMRC you can ask for it to be reconsidered. You should do this if you can provide further information, or there are facts which you think may not have been fully taken into account.

If you are still not satisfied you may be able to appeal to an independent VAT and Duties Tribunal. Whether or not you have asked for a reconsideration, you have the right of appeal against the Commissioners’ decision that you were required to be registered for the period stated and/or the liability to a penalty. You will find out more about the appeal procedure in the leaflet ‘Appeals and Applications to the Tribunals’ which is issued by the President of the VAT and Duties Tribunals. Copies of the leaflet and the forms for making an appeal can be obtained from any VAT and Duties Tribunal Centre or the VAT Helpline (telephone 0300 200 3700).

If you wish to request a reconsideration or submit an appeal to a Tribunal in relation to any decision of HMRC notified in this letter you must do so within 30 days from the date of this letter.

Yours *faithfully/sincerely

*Delete as appropriate