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HMRC internal manual

VAT Civil Penalties

From
HM Revenue & Customs
Updated
, see all updates

Breach of VAT Regulatory Provisions: Calculation and notification of a penalty: Procedure table for issuing warning and assessment letters

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Penalties where a warning letter is required (Section 69 (1) (c) to (f)

Note:

For guidance on what content you should include in Penalty assessment or warning letters see VCP11156.

 

First Breach Warning letters/assessment letters
   
First breach Issue warning letter 1 (VCP11160)
If regulatory requirement complied with within 14 days of date of issue of letter 1 (VCP11160) Issue general warning letter 9 (VCP11168)
If regulatory requirement not complied with within 14 days of letter 1 (VCP11160) and penalty continues to accrue Issue warning letter 2 (VCP11161)
If regulatory requirement not complied with within 14 days of letter 1 (VCP11160) and 100 days has already expired Issue warning letter 2 (VCP11161) with VAT 291 assessment (at lowest rate of £5 per day)
If regulatory requirement complied with within 100 days limit Issue penalty assessment letter 7 (VCP11166) or letter 8 (VCP11167) for period of breach (at lowest rate of £5 per day)
If regulatory requirement not complied with within 100 days limit Issue penalty assessment letter 7 (VCP11166) or letter 8 (VCP11167) assessing for 100 day default (at lowest rate of £5 per day).
If no further breaches within 2 years of date of warning letter 9 (VCP11168) or warning letter 7 (VCP11166) or letter 8 (VCP11167) The cycle starts again –
On the next breach issue warning letter 1 (VCP11160)  
If further breach within 2 years of date of warning letter 9 (VCP11168) or warning letter 7 (VCP11168) or letter 8 (VCP11167) Use the procedures for second and subsequent breaches (see below).
Second and further breaches Warning letters / assessment letters
  Issue warning letter 10 (VCP11169) when breach discovered (with VAT 291 if 100 day period already expired) at the rate of £10 per day for a 2nd breach and £15 per day for subsequent breaches.
If regulatory requirement complied with within 100 days limit Issue penalty assessment letter 7 (VCP11166) or letter 8 (VCP11167 for period of breach at the rate of £10 per day for a 2nd breach and £15 per day for subsequent breaches.
If regulatory requirement not complied with within 100 days Issue penalty assessment letter 7 (VCP11166) or letter 8 (VCP11167) assessing for 100 day default at the rate of £10 per day for a 2nd breach and £15 per day for subsequent breaches.
If no further breaches within 2 years of date of warning letter 10 (VCP11169) or warning letter 8 (VCP11167) or letter 9 (VCP11168) The cycle starts again
On the next breach issue warning letter 1 (VCP11160)  
If further breach within 2 years of date of warning letter 10 (VCP11169) or warning letter 7 (VCP11166) or letter 8 (VCP11167) The cycle starts again
On the next breach issue another warning letter 10 (VCP11169)