Penalties ― EC Sales List ― failure to file and inaccuracies

Produced by Tolley
Penalties ― EC Sales List ― failure to file and inaccuracies

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

  • Penalties ― EC Sales List ― failure to file and inaccuracies
  • When will a penalty be levied?
  • Failure to submit an ESL
  • Submitting a materially inaccurate ESL
  • Can the penalty be reduced or mitigated?
  • Issuing the Penalty liability notice (PLN)
  • Failure to submit an ESL
  • ESL has a material inaccuracy
  • Is there a deadline for assessing the penalty?
  • Levying the penalty
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the penalties that can be imposed on a business that either fails to submit an EC Sales List (ESL) or submits a materially inaccurate ESL. This note should be read in conjunction with the EC Sales List (ESL) guidance note. UK VAT registered businesses that make supplies of goods or services to customers who are VAT registered in other EU member states are required to complete and submit an ESL.

Note: EC Sales Lists were only required whilst the UK was a member of the EU and during the transaction period ending on 31 December 2020. UK businesses are not required to file EC Sales lists for supplies made from 1 January 2021.

When will a penalty be levied?

The business could be liable to a penalty in respect of the following.

Failure to submit an ESL

A penalty can only be applied on a business that has an obligation to submit an ESL and has failed to do so. Businesses are not required to submit nil ESL and therefore will not be liable to a penalty where no ESL was actually due.

If HMRC has granted permission for individual group members to submit separate ESLs, and one of those members fails to submit a statement when required to do so, the default is not a failure to submit an ESL, it is treated as a material inaccuracy.

The date the ESL must reach HMRC depends on whether a paper or electronic submission is being made:

  1. paper ESL

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