Penalties for inaccuracies ― overview

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Penalties for inaccuracies ― overview
  • Effective date of the inaccuracy penalty
  • What is an inaccuracy?
  • Types of inaccuracy

This guidance note provides an overview of the types of penalties that can be imposed by HMRC and when they will be imposed in respect of VAT. This note should be read in conjunction with the Overview of the three penalties introduced from 1 April 2010, Penalties for inaccuracies ― calculating the penalty, Penalties for inaccuracies ― assessing the penalty and Penalties for inaccuracy ― agents and officers guidance notes.

HMRC has also provided the following factsheets: CC/FS7a  regarding inaccuracies and CC/FS7b  regarding under-assessments.

Effective date of the inaccuracy penalty

From 1 April 2009, there is a penalty for filing inaccurate VAT documents and returns. The changes were introduced on the following date for VAT:

  • the inaccuracy is contained in (or the under-assessment relates to) a return or other document that is due to be filed on or after 1 April 2009, and
  • the return or other document (or under-assessment) relates to a tax period beginning on or after 1 April 2008

CH81000; FA 2007, Sch 24; CH81012; CH81013

For other indirect taxes the penalty was applicable:

  • where the inaccuracy is contained in a return or other document that is due to be filed on or after 1 April 2010, and
  • the return or other document relates to a tax period beginning on or after 1 April 2009

The following exceptions relate to inaccuracies with a different tax period to that in the normal rule, or those that must carry a specific date. In all cases, the filing date for the

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