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Failure to comply with the regulatory requirements set out in paragraphs 69 (1) (a) to(g), of the VAT Act 1994, makes a person liable to a general regulatory penalty.

»Ê¹ÚÌåÓýappre is no liability to a regulatory penalty if the trader is assessed for a default surcharge, see VCP10500, for the same failure. This includes default surcharge due for late payments on account.

»Ê¹ÚÌåÓýapp penalty rate to be applied depends on which regulatory requirement is breached.

General regulatory penalties

»Ê¹ÚÌåÓýapp penalty rates for a failure referred to in section 69(1)(a) to (g) are contained insection 69 (3)
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• If there has been no previous failure to comply with the requirement within 2 years prior to the present failure - £5.
• If there had been only one such occasion in that period - £10.
• In any other case - £15.

»Ê¹ÚÌåÓýappre is a minimum penalty of £50 (section 69 (1)).

Note: An initial penalty for a breach of a regulatory requirement should always be raised at the lowest rate of £5 irrespective of the number of previous breaches identifiable within the 2 years preceding the failure, unless a warning letter has been sent for an earlier breach which was complied with, where the £10 rate applies.

Subsequent breaches should be penalised at the higher rate of £10 for a second failure or £15 for a third or subsequent failure.

»Ê¹ÚÌåÓýapp penalty rate is applied to the number of days a failure continues up to a maximum of 100 days.
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