Misdeclaration penalty: Calculation and notification of a misdeclaration penalty: Applying the penalty
Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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 steps should be followed before you notify any civil penalty and at the review stage of any formal or informal appeal. It is important in any appeal case that you can show fairness and equality of treatment.
|1.||Establishing liability - where reasonable excuse exists there is no liability to penalty.|
|2.||Quantifying the liability - if a liability exists it should be quantified.|
|3.||Raising an assessment - HMRC has discretion whether or not to assess any penalty, interest or surcharge. In exercising discretion, you must:|
- maintain equality in the application of civil penalties
- take full account of the circumstances of the particular case
consider the fundamental objective of civil penalties is to encourage trader compliance. 4. Notifying the assessment - Where an assessment is made it must be notified as set out in VCP10810. For an overview of the operational procedures which lead to the application of a penalty, see VCP10823.