Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Output tax declared too soon
Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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 following question should be addressed when considering reasonable excuse
- Is the trader liable for MP just because he had accounted for output tax too soon?
For example, if a trader on quarterly VAT periods declared the output tax on a sales invoice dated 1 July 1994 on his 06/94 return then there would be an over-declaration in period 06/94 and an under-declaration in 09/94.
Whilst there is a need to raise an assessment to correct the GAT for both periods, MP is inappropriate and the MP inhibit should be set in respect of the under-declaration.