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HMRC internal manual

VAT Civil Penalties

Breach of VAT Regulatory Provisions: Action to take with Regulatory Penalties: Breach of Regulatory Provisions Letter 1

If you are issuing a penalty warning letter instructing the trader to comply with a regulatory requirement within 14 days under Section 69 (1) ( c) to (f), it should include the following text


Name of trader/(unregistered person) ** -–-–-–-–-–-–-–-–-–-–-–-— VAT registration number **

It has come to our attention that you have not complied with XX * which requires you to *.

Failure to comply with XX* renders you liable to a penalty under Section 69 (*) of the VAT Act 1994.

If you do not comply with XX * within 14 days of the date of this letter by * (insert conduct required) a penalty assessment will be made under section 76 of the VAT Act 1994. The commencement date for the penalty would be XX.XX.XX*. the date you breached the regulatory requirement.

The penalty is £5 each day the failure continues if there has been no previous breach of this regulatory requirement in the 2 year period prior to the beginning of your failure to comply with the regulatory requirements. The daily penalty is, however, £10 per day if there has been a previous breach within the 2 year period and £15 per day if there has been more than one breach within the 2 year period and for subsequent breaches within the 2 year period. The penalty is raised up to a maximum limit of 100 days for each period of failure and will be the greater of the sum of the daily penalties or £50.

You are advised in your own interests to comply with XX * as soon as possible after receipt of this letter and to notify us to this effect.

Yours faithfully/sincerely,

  • Insert relevant text

** delete as appropriate