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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Calculation and notification of a misdeclaration penalty: Notification of a withdrawn, reduced or increased penalty

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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

When you have to withdraw, reduce or increase a penalty you should.

  • Notify the trader of all periods for which the misdeclaration penalty (MP) is to be

    • withdrawn, see the specimen letter at VCP10813 
    • reduced, see the specimen letter at VCP10813
    • increased, see the specimen letter at VCP10812.
  • Input on VALID a separate Form VAT 651 for each period for which a penalty has been withdrawn, reduced or increased, see VCP10816.

Note: Both copies of the VAT 651 should be clearly headed in red “VCP10812 / VCP10813 Letter issued”, (as appropriate)

You should include percentage and details of mitigation allowed on your notification where appropriate.

You should complete the registration number, MP payable and LVO code boxes on the remittance slip before sending the letter to the trader.