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HMRC internal manual

VAT Civil Penalties

Calculation and notification of a penalty: Issuing a warning letter

HMRC must in law, issue a warning letter within 6 months of a material inaccuracy being identified on an EC Sales List.

If you have been notified by the ESL Compliance Unit of a material inaccuracy or you have identified a material inaccuracy during a visit you must issue a warning letter. The following is a suggested form of words:

Dear Sir / Madam

*You will recall that during my visit of #……… I pointed out that the EC Sales List you submitted for the period #……….. [e.g. 06/4] covering the period #………..[e.g. 1 September 06 to 31 December 06] was *inaccurate / contained material inaccuracies.

*I understand that you have recently received correspondence from the EC Sales List (ESL) Correction Unit, regarding material inaccuracies on your EC Sales List for the period *(s)#………… [e.g. 06/4] covering the period #……….. [e.g. 1 September 06 to 31 December 06].

The EC Sales List is an important document and every effort has to be made to ensure that the information contained in the list is correct. You are therefore warned that, if any future EC Sales List you submit is found to contain inaccurate information, you may receive a notice of liability to a penalty if the submission date for that EC Sales Listfall within 2 years of the day after this warning is issued. This will mean that a further inaccuracy within 2 years of the service of the notice will render you liable to a penalty of £100

Voluntary correction or notification of any errors will not result in the service of a notice or the imposition of a penalty.

Should you require any further information or assistance, please contact me at the above address.

Yours faithfully

Officer of HM Revenue and Customs

*delete as appropriate

insert as appropriate

You need to remember that in the case of a group registration, any warning letter or subsequent penalty should be addressed to the representative member of the group. This is because the responsibility to submit an ESL and for the accuracy of it in a grouping situation, is that of the representative member and not of the individual member of the group.

Remember that in all cases the warning letter must be issued within 6 months of the discovery of the inaccuracy.