VCP11344 - Incorrect certificates to zero-rating and lower rate supplies: Calculation and notification of a penalty: Assessing the penalty
Time limits
VATA 1994 Section 77 (1)(b) states that the penalty must be assessed within 4 years of the event giving rise to the penalty, that is, the issue of the incorrect certificate. However, penalties should be issued promptly as soon as the facts are known.
Notifying the penalty assessment
The penalty should be assessed by sending a letter as the person concerned will not normally be VAT registered. You can find a suggested form of words in “The Assessment Letter” in VCP11345. You will need four copies of the letter
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two copies to be sent to the trader together with a reply paid envelope addressed to the Cumbernauld Tax Accounting Centre at: HMRC
St Mungo’s Rd
Cumbernauld
Glasgow
G67 1YZNote: one copy of the letter should be headed “Remittance Advice” in red
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one copy to be forwarded to the Cumbernauld Tax Accounting Centre, and
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one copy to be retained in the local office records.
The assessing officer should contact the Cumbernauld Tax Accounting Centre to obtain a penalty reference number which should be included in the penalty assessment letter.
Authorisation and countersignature
The penalty assessment should be authorised and countersigned at the appropriate level using the same authority limits that are used for the VAT 291 penalty assessment form. This should include cases where a decision has been made not to assess or if the penalty is withdrawn.
Accounting procedures
The assessing officer should contact the Cumbernauld Tax Accounting Centre to get a penalty assessment reference number which should be included in the penalty assessment letter.
VAT certificate penalties are recorded under CECAS account code 20845.