HMRC VAT Penalties

Time limits on HMRC / VAT

Didn't find your answer?

Hi

 

Apparently HMRC only have 12 months from a failure to notify event or becoming aware of the potential lost revenue to raise an assessment / penalty.

However I have been told that raising and notification are regarded as two completely separate issues, such that HMRC can notify you long after 12 months have elapsed as long as they raised the penalty internally within 12 months. This seems like cake and eat it to put it mildly. Anyone have an experience of this?

Thanks

Replies (6)

Please login or register to join the discussion.

VAT
By Jason Croke
15th Jun 2024 13:55

Your only other post was about penalties too.

HMRC internal manuals cover all of this, https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch51820

Thanks (0)
Replying to Jason Croke:
avatar
By evan9
17th Jun 2024 18:31

Thanks, but I don’t see failure to notify penalty time limits in the manuals you linked to.

If it is there could you quote the rule no/link.guidance page? Thank you.

Thanks (0)
Replying to Jason Croke:
avatar
By evan9
18th Jun 2024 05:20

.

Thanks (0)
avatar
By taxdigital
15th Jun 2024 14:33

evan9 wrote:

Hi

HMRC can notify you long after 12 months have elapsed as long as they raised the penalty internally within 12 months.

Whilst I don't know what that means, I can see the following in the legislation:

An assessment of a penalty for failure to notify (e.g. VAT registration) must be made before the end of the period of 12 months beginning with the end of the appeal period. Now the meaning of appeal period includes the period during which an appeal that has been brought about has not been determined or withdrawn. So, that means the appeal period continues on up until the appeal has been determined, and the 12 months clock starts from that point. (Para 16, Sch 41, FA 2008).

Thanks (0)
Replying to taxdigital:
avatar
By evan9
17th Jun 2024 18:36

Why would there be an appeal if no penalty had been raised?

To clarify my original post. There is much information on the web saying that hmrc must raise a penalty within 12 months of becoming aware of potential lost revenue. However, I have been told that they regularly notify people of penalties after 12 months and when challenged say the penalty was raised within 12 months, we just didnt tell you about it.

Thanks (0)
Replying to evan9:
avatar
By taxdigital
17th Jun 2024 20:26

evan9 wrote:

Why would there be an appeal if no penalty had been raised?

To clarify my original post. There is much information on the web saying that hmrc must raise a penalty within 12 months of becoming aware of potential lost revenue. However, I have been told that they regularly notify people of penalties after 12 months and when challenged say the penalty was raised within 12 months, we just didnt tell you about it.

I’m afraid I can’t comment on what you have been told or what’s written on the web. When it comes to tax, the starting point is the legislation. You appear to be looking for something else, so start with HMRC stuff here:

https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch74200

And with that I’m out.

Thanks (0)