VCP10466 - Belated Notification Penalty: Issuing Penalty Assessments: Revision or adjustment of a penalty

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008.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.

You will need to take into account any credit allowable for VAT paid in other Member States for acquisitions or distance sales, when considering revising a penalty assessment for late registration

This will not apply to penalties raised where traders exempt from registration are late in notifying

• a change in the nature of supplies
• a material alteration in the proportion of zero rated supplies, or
• delay notifying an acquisition supply which is not zero rated.

If revision or adjustment of a penalty assessment is necessary you must

• if a further penalty is to be issued, input form VAT292 on VALID
• if the penalty is to be reduced or withdrawn, input form VAT651 on VALID and notify the trader by letter.

Note: If the trader is not to be registered you should issue either letter 11 or 12 to notify the trader of the revision, see VCP10492 and VCP10493 respectively.