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HMRC internal manual

VAT Civil Penalties

HM Revenue & Customs
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Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: New registration

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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 questions should be addressed when considering reasonable excuse

  • Was it the trader’s first visit?
  • Was the error made in respect of a complex or contentious area such as partial exemption, tour operator’s scheme etc?
  • Has the trader been previously registered, or involved in a similar VAT registered activity?