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HMRC internal manual

VAT Civil Penalties

Unauthorised issue penalty: Discretion, reasonable excuse and mitigation: Negligible amounts letter

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008. The VAT and Excise Wrongdoing penalty applies where a person makes an unauthorised issue of an invoice on or after 01/04/2010. If an unauthorised invoice has been issued before 01/04/2010 the S 67 penalty will continue to apply.

Please see the Compliance Handbook CH90000 Penalties for more information about the VAT and Excise Wrongdoing penalty.

Specimen Letter: Negligible Amounts.

Dear [ ]

VAT Registration Number:

Local Office Number:

You have been issuing invoices *showing amounts as VAT / showing as VAT inclusive, when you were not authorised to do so

The amounts represented as tax on these invoices, which are detailed below, are recoverable as a debt due to the Crown, under Schedule 11, paragraph 5 of the VAT Act 1994

(Insert details of the invoice(s) and the tax shown)

You are also liable to a civil penalty under Section 67 (1) ( c) of the VAT Act 1994. However, on this occasion, after careful consideration, we have decided to limit our action to the recovery of the amounts charged to tax

It is unlikely that similar leniency will be shown in the event of any further irregularity in matters relating to Value Added Tax

Yours Faithfully

*delete as appropriate.