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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Misdeclaration penalty: Misdeclaration penalty for repeated errors: Penalty Liability Notice

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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

The Penalty Liability Notice (PLN) Form VAT 670

A PLN (Form VAT 670) is a computer generated letter which informs traders they have made a material error and that future errors may lead to a penalty being imposed.

It is designed to be an early warning which provides an opportunity for traders to avoid penalty if they make a voluntary disclosure. The PLN is intended to assist traders and does not in itself carry any implication that the trader is persistently in error.

The mainframe will issue the PLN direct to the trader and a second copy will be sent to the local office for retention in the trader’s folder.

Issuing a PLN

A PLN will be issued if both of the following conditions are met

  • errors on a return have breached one or both of the objective tests for MP(R), and
  • the period which breached the objective tests is within 5 VAT periods of the processing of the VAT 641, 642, 643 or 644. The 5 VAT period span includes the current VAT accounting period for which no return will have been received.