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HMRC internal manual

VAT Civil Penalties

Incorrect certificates to zero-rating and lower rate supplies: Calculation and notification of a penalty: The penalty assessment letter


Personal and Confidential


Section 62 (1) of the Value Added Tax Act 1994 provides that:

The issue of a certificate to the supplier that a supply or supplies, fall or will fall wholly or partly within any of the groups of Schedule 7A, Group 5 or 6 of Schedule 8, or Group 1 of Schedule 9 to the VAT Act 1994 or the issue of a certificate to a supplier for the purposes of S18B(2)(d) or 18C(1)( c) of the VAT Act 1994 that is incorrect, will attract a penalty

The Act further provides that the amount of the penalty shall be equal to the difference between the amount of the VAT which would have been chargeable on the supply or supplies if the certificate had been correct and the amount of VAT actually charged

By your issue of an incorrect certificate concerning (insert reason for issue of certificate) you have rendered yourself liable to a financial penalty

HMRC by virtue of the powers conferred on them by Section 76 of The Value Added Tax Act 1994, assess you for a penalty of £-—- calculated as follows

“(Insert details of calculation)”

You must pay this amount to the Cumbernauld Tax Accounting Centre (insert address) immediately enclosing the remittance copy of this letter and using the enclosed reply paid envelope.

If you have any further information that you want me to consider, please send it to me know.

If you do not agree with the decision in relation to your liability for the penalty assessment or the amount of the penalty assessment you can

  • ask for the decision to be reviewed by an HMRC officer not previously involved in the matter, or
  • appeal to an independent tribunal.

If you opt for a review you can still appeal to the tribunal after the review has finished.

If you want a review you should write to [name / team] at [address] within 30 days of the date of this letter, giving your reasons why you do not agree with my decision.

If you want to appeal to the tribunal you should send them your appeal within 30days of the date of this letter.

You can find further information about appeals and reviews on the HMRC website or you can phone the number on this letter. You can find out more about tribunals on the Tribunals Service website or you can phone them on 0300 123 1024.

Yours* faithfully / sincerely

*(delete as appropriate)