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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Breach of VAT Regulatory Provisions: Action to take with Regulatory Penalties: Penalty warning and penalty assessment letters

The following letters can be used as a basis for issuing penalty warning letters, penalty assessment letters or penalty assessment letters which include a further warning.

Due to the varied nature of the wide range of regulatory requirements covered by VATA 1994 Section 69 it is not possible to produce a comprehensive set of penalty warning letters or penalty assessment letters to cover all eventualities. The letters should be tailored to cover the specific regulatory requirement at issue. In particular, in some circumstances the 14 day deadline in the warning letter may be inappropriate if the trader needs to rectify a major breach and you may wish to extend this.

The warning letter may require the trader to rectify breaches of the regulatory requirements already committed in addition to a general requirement to adhere to the relevant regulatory requirement in the notice period.

Procedures for issuing warning letters and penalty assessment letters for a failure to keep or produce records may be in found V1-24B Officer’s powers. You can find guidance on the procedures for a failure to provide information or a failure to preserve records in V1-24B Officer’s powers. However, the penalty assessment letters for a failure to preserve records can be found in VCP11162 and VCP11163.

The relevant standard letters, see VCP11160, VCP11161, VCP11166 and VCP11167 should be used in cases where there is a failure to provide information. The Notice of Requirement which precedes the penalty warning and penalty assessment letters for a failure to provide information must be prepared in conjunction with Accounting and Records Team.

If you decide that a penalty warning or assessment letter is required you must include the appropriate text in any warning or assessment letter you issue. Examples of the text youshould use are as follows, for
 

  • A penalty warning letter instructing the trader to comply with a regulatory requirement within 14 days under Section 69 (1) ( c) to (f), see VCP11160.
  • A penalty warning letter confirming that a penalty assessment is due following a traders failure to comply with a regulatory requirement section 69 (1) ( c) to (f), see VCP11161.
  • A penalty assessment letter for a failure to preserve records by a registered trader, see VCP11162.
  • A penalty assessment letter for a failure to preserve records by a non registered person, see VCP11163.
  • A penalty assessment letter (including the option to issue a further warning) under Section 69(1)(a) or (g), see VCP11164.
  • A penalty assessment letter for non compliance with Section 69(1) (b) regarding notification of appointment of VAT representatives, see VCP11165.
  • A penalty assessment letter under Section 69 (1) ( c) to (f) for a registered trader, see VCP11166.
  • A penalty assessment letter under Section 69 (1) ( c) to (f) for a non registered person, see VCP11167.
  • A general warning letter for registered traders and non registered persons, see VCP11168.
  • A further warning letter confirming that a penalty assessment is due following a failure to comply with a regulatory requirement Section 69 (1) ( c) to (f) for registered traders or non registered persons, see VCP11169.

For details of when a warning letter is not necessary, see VCP11157.