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HMRC internal manual

VAT Registration

HM Revenue & Customs
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Failure to notify liability for registration and belated notification: arrears of tax

The VAT Act 1994, Section 77(4) allows the Commissioners to calculate arrears for the past twenty years in failure to notify and belated notification cases.

For the purposes of this guidance, the term ‘arrears’ is used to describe the tax accruing from the EDR up to the date of notification on the VAT 1.

‘Gross arrears’ means the total output tax due for the period without deduction of input tax.

‘Net arrears’ means the gross arrears minus the input tax.