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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Why a penalty arises: The law supporting the penalty

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after 01/04/2009. Misdeclaration penalty will still apply where the due date is before 01/04/2009.

Please see the Compliance Handbook CH80000 Penalties for Inaccuracies for further details.

Misdeclaration penalties are assessed under sections 63 and 64 of the Value Added Tax Act 1994 (formerly sections 14 and 14A of the Finance Act 1985)

  • S63 of the VAT Act 1994 is for very large errors (the former SMP)
  • S64 of the VAT Act 1994 for repeated errors. This is the successor to PMP and is referred to in this section as Repeated Misdeclaration Penalty MP(R).