»Ê¹ÚÌåÓýapp

Belated Notification Penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 of the Finance Act 2008. »Ê¹ÚÌåÓýapp Failure to Notify penalty applies to obligations to notify HMRC of a liability to be registered for VAT on or after 01/04/2010. »Ê¹ÚÌåÓýapp 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 CH70000Ìýfor more details about the new failure to notify penalty.

»Ê¹ÚÌåÓýapp penalty assessment is normally based on the

• trader’s calculation of ‘relevant VATâ€�
• the trader’s turnover, or
• HMRC Officer’s assessment.

»Ê¹ÚÌåÓýapp trader is asked to provide a calculation of ‘Relevant VATâ€� in the belated notification penalty letter.

If the trader does not respond within 30 days of the penalty letter, unless an HMRC officer has assessed the ‘relevant VAT� an estimate should be made on the other evidence available (usually turnover) and a penalty assessment made.

If the trader provides a calculation of ‘relevant VAT� which is acceptable or an HMRC officer has assessed ‘relevant VAT �, you should calculate the penalty at the appropriate percentage, see VCP10455, of the net tax liability (relevant VAT) OR £50 if greater.

If the trader fails to respond to the penalty letter, in the absence of more accurate information, you should calculate the net tax liability by applying the following formula

• Number of days in the period of failure divided by 365, then
• Multiply that figure by the amount entered on box 23 of VAT 1 (consider as tax inclusive) and multiply that by the VAT fraction see note below, which then
• Equals the net tax ‘y’ÌýÌýÌ�

Note: »Ê¹ÚÌåÓýapp VAT fraction has been 1/6 since 04 January 2011.

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»Ê¹ÚÌåÓýapp penalty will be the appropriate percentage, see VCP10455, of ‘yâ€� or £50, whichever is the greater.