This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Civil Penalties

Belated Notification Penalty: Belated Notification forms and letters: Letter 6

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008.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

Failure to notify

‘’Personal and Confidential’’


On the information available it appears that under the VAT Act 1994, Schedule 1 you were required to notify your liability to be registered for Value Added Tax no later than … You have now notified this liability on Form VAT 1 dated … (and your letter dated …).

You are required to pay any outstanding tax due whether or not you have expressly charged tax to your customers. The first tax return you will receive from the VAT Central Unit in due course will cover the period which commences on your effective day of registration, ie (insert date) … and you should on that return account for, and at the same time pay, all the tax due on supplies made from that date, up to the end of the period shown on your certificate of registration.

Your failure to notify this liability at the appropriate time has rendered you 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 of your net tax liability (output tax less input tax) for this period within 30 days of the date of this letter using the return envelope provided. Information about output tax and input tax can be found in Notice 700/15 - Ins and Outs of VAT and in Sections 7 to 13 of 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 HMRC will, under the powers conferred on them by Section 76(1) of the Act, assess you for a penalty based on the turnover you have quoted on your Form VAT 1. A penalty based on your net tax liability may be lower than a penalty based on turnover.

*Include the following paragraph if the trader has made immediate payment of all or part of the arrears:

‘The return is in no circumstances to be altered to allow for payments already made, but you should complete the return for the full period, enclose a letter giving details of earlier payments and pay the balance of any tax still due.’

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 forms for making an appeal can be obtained from any VAT and Tribunals 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 necessary