VCP10422 - Belated Notification Penalty: Considerations prior to issuing a penalty assessment: Administrative considerations
Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008. The Failure to Notify penalty applies to obligations to notify HMRC of a liability to be registered for VAT on or after 01/04/2010. The Belated Notification Penalty under Section 67 VATA 1994 continues to apply to obligations to notify a liability to be registered for VAT before 01/04/2010.
Please see the Compliance Handbook CH70000 for more details about the new failure to notify penalty.
Penalties for belated notification should not be imposed in the following circumstances
- If a trader is classified as a repayment trader, unless there is a liability to relevant VAT in the penalty period where a penalty should be assessed under the normal rules.
Note: If a trader is classified as a payment trader but there is a repayment due in the penalty period resulting in a nil liability for relevant VAT the minimum £50 penalty should be assessed.
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Traders whose registrations have been cancelled compulsorily by HMRC because they were in default while trading below the registration threshold (not because they have ceased to make taxable supplies) may belatedly notify a subsequent liability to register.
Note: It is now recognised that in these circumstances we did not have the legal authority for compulsory cancellation, a civil penalty for late registration is not to be imposed.
- A person dies before issue of a belated notification penalty.
Note: Where an individual is assessed for a belated notification penalty before their death the penalty can be maintained after their death.
Note: If an individual dies before they are assessed for a belated notification penalty no penalty should be assessed. The person is deemed not to be liable to a penalty.