VATREVCHG32000 - The Reverse Charge Sales List (RCSL): Penalties for failure to submit and inaccuracies in an RCSL

Introduction

From 1 July 2022, businesses are no longer required to report information to HMRC about sales of mobile phones or computer chips in the UK. This does not remove the requirement for businesses to operate the reverse charge procedure.

However, businesses are still required to report such sales up to and including 30 June 2022 and the following guidance still applies.

From 17 October 2022, businesses are no longer able to submit a sales list or make any amendments via the online portal.

The following guidance is historical and only applies to sales of mobile phones or computer chips up to and including 30 June 2022.

The legal provisions relating to the raising of penalties where a taxable person either submits a RCSL with inaccuracies or fails to submit a RCSL are found in sections 65 and 66 of the VAT Act 1994.

Failure to submit an RCSL

The legal provisions covering the issue of penalties for failure to submit an RCSL are contained within Section 66 the VAT Act 1994 and essentially follow those for ECSLs.

Briefly, if a taxable person fails to submit an RCSL he will be charged a penalty calculated on a daily basis, for a maximum of 100 days, which increases as each further default occurs, at the following rates:

  • 1st penalty £5.00,
  • 2nd penalty £10.00,
  • 3rd & subsequent penalties £15.00.

N.B. The £15.00 penalty continues to be applied until he has had 4 clear quarters.

Inaccuracies

The legal provisions covering the issue of a penalty for inaccuracies are contained within Section 65 of the VAT Act 1994.

Briefly, if HMRC discovers a 'material inaccuracy' then the taxable person may be liable to a penalty of £100 per RSCL. However, there are certain limited circumstances where the inaccuracy will not be treated as 'material' and these are set out in Sections 65(3) and 65(4).

Issuing a penalty

If you believe a penalty is due either because the RCSL contains an inaccuracy or because the taxable person has failed to submit an RCSL please contact Late filing and payment penalties, technical support: Technical advice: Debt Management.