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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Belated Notification Penalty: Belated Notification forms and letters: Letter 8

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008.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

TOGC: Advice of registration when application for reallocation of a VAT registration number has been refused

Dear

  • I refer to your application on Form VAT 68 for a reallocation to you of the VAT registration number … previously used by ….

I have to inform you that your application has been refused. (Add reason for refusal.)

You have been registered for the purposes of Value Added Tax with the # [a new] number … with effect from … (EDR).

From that date you are liable to account for Value Added Tax to HMRC as explained in the Notice 700/1 Should I be registered for VAT?. Your certificate of registration will be forwarded in due course.

‘The VAT Guide (Notice 700)’ and Notices ‘Filling in your return (Notice 700/12)’, ‘The Ins and Outs of VAT (Notice 700/15)’, ‘Keeping records and accounts (Notice 700/21)’, ‘Catalogue of publications (Notice 999)’, ‘VAT Enquiries Guide (Notice 700/51)’, ‘What if I don’t pay (Notice 930)’, ‘Visits by HMRC officers (Notice 980)’ # and … are enclosed for your guidance/already in your possession.

  • Any tax paid or repaid under registration number… since … (EDR) will be attributed to your # [new] registration number. # [According to our records, you have submitted a return for the period ended … part of which is proper to the new registration number …].

  • Please advise this office within 30 days, of the output tax and input tax figures incurred under the old registration (ie between … EDR) and … (return for period ended under old registration number) and any amounts of tax that you have paid in respect of taxable supplies that you have made since … (EDR).

*In due course you will also receive a VAT return form covering the period from … (EDR) to a current date. You should declare on that form all your supplies made in that period. If the return shows tax to be due you should remit the sum involved to the address shown on the form less any tax

# [you have] already paid under registration number … for that period.

Your failure to notify your liability to register 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 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 turnover. A penalty based on your net tax liability may be lower than a penalty based on turnover.

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 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

+Omit if no application made

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