Misdeclaration penalty: Misdeclaration penalty for repeated errors: What is the penalty warning period
Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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.
Penalty Warning Period (PWP)
The Penalty Warning Period is the span of eight VAT periods detailed on the Penalty Liability Notice (PLN). The eight VAT periods begin from the first day of the period in which the PLN was served.
During a warning period the trader may breach the objective tests once without a penalty ensuing. The trader will not be informed when this has occurred. Misdeclaration penalties (MP) are designed to penalise repeated errors. Repetition is not considered to have occurred until errors in at least two periods have been made within a warning period.
The warning period cannot be extended by the serving of a further PLN within the same eight period span. However, once the warning period elapses a new one can be set up.
Although a warning period will eventually elapse it will always be live. The only time it will no longer be live is after it has been cancelled. This means that the warning period will remain available for the potential identification of MP(R) arising from future assessments or amendments as long as they are made within the time limits.
Where a warning period is live the “R1” screen on VISION will carry the legend “PLN Live”. The “Live Period Details” screen also displays a number of fields which indicate the status of a VAT period for MP(R) purposes.