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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Calculation and notification of a misdeclaration penalty: Form VAT651 what to input

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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 completing Form VAT651 you must input the following

  • VAT registration number
  • Penalty date: default date from the VAT 291
  • Period reference: penalty period on the VAT 291
  • Penalty type: code 08 or 10 as per the VAT 291
  • Current penalty liability
  • Amended penalty liability: new penalty amount
  • Reason for change e.g. mitigation allowed or further VAT 641 issued
  • Signature
  • Countersignature (see below)


Form Officer Higher Officer SO Grade 7
VAT 291 £20,000 £50,000 £1 million No limit
VAT 651 £20,000 £50,000 £1 million No limit

These limits are only recommendations. The decision on setting the countersigning limits has been delegated to Local Offices.


Note: Both copies of the VAT 651 should be headed in red. If the penalty has been increased write “VCP10812 Letter issued”. If the penalty has been withdrawn or reduced write “VCP10813 Letter issued”. Then file the trader’s copy of the letter with the penalty papers.