An interesting case addressed the definition of Potential Lost Revenue (PLR) (FA 2008, Sch 41). Although this case concerned the high income child benefit charge, it is the same Schedule that covers a failure to notify liability to register for VAT.
HMRC’s submission in para 17 were totally accepted by the Upper Tier Tribunal. The central argument was that the calculation of PLR is not identical to the calculation of any assessment to tax. In particular, the Upper Tier criticised the FTT for holding that the lack of a tax assessment meant that a penalty COULD NOT arise.
This is an interesting technical point. So you may find a ‘mismatch’ between any VAT calculated as due and a penalty for failure to notify.
About Les Howard
Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire
I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.