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HMRC internal manual

VAT Civil Penalties

From
HM Revenue & Customs
Updated
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Calculation and notification of the penalty: Notifying the penalty using form VAT291

Penalty notification requirements are detailed in Section 76 of the VAT Act 1994.

The penalty notification must specify a date up to which the penalty is assessed. This requirement is fulfilled by completion of the default dates on the VAT291, that should accompany the letter sent to the trader.

The penalty should be notified to the trader by a letter together with a copy of form VAT291.

The VAT291 should also be input to VISION Note: The VAT291 is a multi functional form used to impose a number of civil penalties.

Penalty notification action

Step 1

Identify the default dates from the Penalty Liability Notice (PLN)
 

  • For first defaults the start date will be the day after the 14 days allowed, within the PLN , for the trader to remedy the default.
  • For second or subsequent defaults the start date will be the day after the due date.
  • For all defaults the end date will be the earlier of 100 days later or the date of receipt of the EC Sales List in default.

Step 2

Insert penalty code 12 (failure to submit an EC Sales List)

Step 3

Enter the number of days the penalty is being applied for (ignore the tax liable to penalty box as it doesn’t apply here)

Step 4

Enter the EC Sales List period reference (although this is not essential)

Step 5

Enter the £ value of the penalty

Step 6

Send a copy of the VAT291 together with a letter detailing the particulars of the penalty to the trader and retain copies for processing.

EC Sales List action sheet

Before completing the following action sheet make quite sure that the EC Sales List is still outstanding

VAT REGISTRATION NUMBER …………………………………….

ALL ACTIONS SHOULD BE INITIALLED AND DATED

TRADER NAME …………………………….

MISSING ESL ……………………………… (QTR)

VAT RETURN BOX 8 VALUE £…………………………….. INITIAL DATE

Note any comments (e.g. telephone conversations / useful information)

ON COMPLETION OF ACTION ENSURE ACTION SHEET UPDATED

Steps for completing the action sheet

  • Set up index card record
  • Memo to Electronic Folder E/F
  • Tick box letter issued, see VCP10956, (b/f 14 days to ………… date)
  • Original ESL received ……….. (date)
  • Reminder letter issued, see VCP10952 or VCP10953
  • Copy ESL received and forwarded to ESL Correction Unit
  • Duplicate ESL issued (b/f 14 days to ………. (date)
  • No response to b/f – referred case to officer
  • VAT return Box 8 completed in error – VAT479 prepared / referred to case officer
  • ESLs unlikely in future – VAT19 prepared / referred to case officer
  • Trader ticked Box 6 or 7 – referred to Single Market Liaison Officer
  • Appropriate clearance code entered on D2138

Second and subsequent defaults follow steps below and action as appropriate

  • PLN, see VCP10950, prepared for issue by officer.
  • B/f max 100days to ……………… (date) (monitor monthly).
  • ESL received …………………. (date) (letter issued see VCP10951).
  • No response by 15th day – b/f 6 weeks to ……………… (date) (letter issued see VCP10952).
  • Penalty (VAT291) and letter issued, see VCP10955.
  • Appropriate clearance code, see VCP10949, entered on D2138.