Chapter 16 - Failure to Notify Flashcards

1
Q

Introduction

A

When a trader is late notifying HMRC of VAT registration, three things happen:

1) his registration is backdated to the date from which he was liable to be registered
2) he must also account for output tax on supplies from the date on which he should’ve been registered. Credit for input tax can be given, if normal recovery rules were satisfied on purchases made in the same period
3) he is liable to a penalty for the period of default unless he can convince HMRC there is reasonable excuse for the delay

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2
Q

Calculation of the Penalty

A

Calculated as % of lost revenue. Depends on type of behaviour and the type and quality of disclosure

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3
Q

Non-Deliberate

A

Max penalty: 30%
Min w/unprompted: <12m - 0%, >12m - 10%
Min w/prompted: <12m - 10%, >12m - 20%

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4
Q

Deliberate but not Concealed

A

Max penalty: 70%
Min w/unprompted: 20%
Min w/prompted: 35%

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5
Q

Deliberate and Concealed

A

Max penalty: 100%
Min w/unprompted: 30%
Min w/prompted: 50%

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6
Q

Other Points

A

Failure to notify penalties must be paid within 30 days, interest is chargeable thereafter
Penalties can be appealed
No penalties if there’s reasonable excuse

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7
Q

Interaction with Other Penalties

A

Failure to notify penalty is reduced by the amount of any penalty calculated in respect of the same tax liability

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