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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Calculation and notification of a misdeclaration penalty: Penalty assessments for transfer of going concern

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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

On receipt of D2211 marked ‘Pre-TOGC’ you must establish the date of transfer, then follow the action guide below.

Step 1 Is the penalty after the transfer of going concern (TOGC). Including the period in which the transfer occurred, if
  • yes, go to Step 2
  • no, go to Step 3    
      Step 2 Process the penalty in the normal way. Take no further action.
      Step 3 Is the penalty a new or increased amount, if
  • yes, go to Step 4
  • no, go to Step 5    
      Step 4 Mark the D2211 ‘Pre-TOGC’, see VCP10753. Take no further action.
      Step 5 Recalculate the penalty. Was the penalty paid, if
  • yes, go to Step 6
  • no, go to Step 9    
      Step 6 Make reasonable attempts to contact transferor to repay monies. Have you made contact, if
  • yes, go to Step 7
  • no, got Step 8
Note: If local knowledge, including enquiries of the transferee cannot establish an address for the transferor, no further action need be taken.    
  Step 7 Authorise a manual repayment of the penalty due to the transferor. Under no circumstances should the transferee’s ledger be amended. Take no further action.
  Step 8 Mark D2211 ‘Pre-TOGC, period no contact with transferor - no further action, see VCP10753.
  Step 9 Take action to reduce the penalty debt on file.