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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Insurance Premium Tax: Calculation and notification of a penalty: Time limits

Please note: penalties under Schedule 7 Finance Act 1994 for failure to notify liability to register have been replaced by the Failure to Notify penalty introduced by Schedule 41 Finance Act 2008. The Failure to Notify penalty applies where an obligation to notify liability to register for IPT occurs on or after 01/04/2010. Penalties under Schedule 7 Finance Act 1994 will continue to apply where an obligation to notify occurs before 01/04/2010.

Please see the Compliance Handbook CH70000 for more information about the Failure to Notify penalty.

Please note: penalties under the Finance Act 1994 for failure to provide information and failure to produce records have now been replaced by penalties under Schedule 36 Finance Act 2008 where HMRC have requested information or documents on or after 01 /04/2010. If HMRC requested information or documents before 01/04/2010 the Finance Act 1994 penalties will continue to apply.

Please the Compliance Handbook CH20000 for more information about information and inspection powers.

Late notification penalty for late notification of liability to register

Where tax has been lost a penalty for late notification of registration can be assessed within a period of 20 years after the event giving rise to the penalty.

As failure to notify a liability to register is a continuing failure the event date is the day before HMRC is notified of or otherwise became aware of the liability to register.

If tax has not been lost a late notification penalty can be assessed within a period of 3 years after the event date. It is best practice to issue the penalty assessment at the earliest opportunity.

Note: A late notification penalty should not be raised if the person liable to the penalty is deceased.

All other penalties must be assessed within 3 years of the event giving rise to the penalty (Finance Act 1994 Schedule 7, paragraph 26 refers).