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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Factors that may affect the penalty: Transfer of a going concern

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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

If there has been a transfer of a going concern (TOGC) and a new registration number is not set up (VAT 68 action has been approved) then the new legal entity should not be assessed for a misdeclaration penalty (MP) for misdeclarations made by the old legal entity.

The setting of the TOGC indicator prevents the automatic calculation of a MP for any period before the date of transfer.

If a MP has already been triggered for a period before the date of the transfer, and the penalty requires amendment see VCP10830.