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HMRC internal manual

VAT Registration

Failure to notify liability for registration and belated notification: belated notification - calculation of EDR

In a belated notification case where the trader is already registered, you will need to arrange for the EDR to be corrected to an earlier date and a manual return issued to the trader.

Calculating the arrears

Calculate arrears as precisely as possible based on the information available.

Treat the price charged as tax-inclusive unless tax has been charged separately. Where a trader can show that a supply was made before the EDR, but not invoiced until after it, don’t include that supply in your calculation of arrears (and any penalty). This is because the tax point for the supply is before the EDR, and a subsequent invoice cannot create a tax point.

If a trader seeks an adjustment of output tax because some of his goods were eligible for one of the margin schemes, tell him that tax is required on the full selling price of the goods when the conditions listed in paragraph 2.3 Notice 718 The VAT Margin Scheme and global accounting are not complied with.

Do not reduce the gross arrears of tax unless the trader:

  • can produce the necessary evidence of purchase and sale, and
  • makes a claim in writing, substantially in the form of the stock book which is a condition of using any of the margin schemes.