VAT Penalties

[dafcjim]

Hi, I have recently received a VAT penalty which I don't understand. It's the same amount t as what I owe in VAT for the period.

I was late in registration for VAT but would this be why? How can the penalty be the same amount? Id understand if it was a 5% or 10% but a 100% penalty?

I'm a small solo business, and it seems HMRC have no interest in working with small independents.

Jay

 

[Newchodge]

Hi, I have recently received a VAT penalty which I don't understand. It's the same amount t as what I owe in VAT for the period.

I was late in registration for VAT but would this be why? How can the penalty be the same amount? Id understand if it was a 5% or 10% but a 100% penalty?

I'm a small solo business, and it seems HMRC have no interest in working with small independents.

Jay

HMRC expect everyone to understand the basic rules relating to tax, including VAT.

How late were you?

 

[DWS]

Hi, I have recently received a VAT penalty which I don't understand. It's the same amount t as what I owe in VAT for the period.

I was late in registration for VAT but would this be why? How can the penalty be the same amount? Id understand if it was a 5% or 10% but a 100% penalty?

I'm a small solo business, and it seems HMRC have no interest in working with small independents.

Jay

It depends on the reason for the penalty, a 100% penalty is usually only charged for a deliberate and concealed action.
Did HMRC prompt you to register or was it a genuine mistake and you registered as soon as you realised?

 

[Elliot Green]

Hi, I have recently received a VAT penalty which I don't understand. It's the same amount t as what I owe in VAT for the period.

I was late in registration for VAT but would this be why? How can the penalty be the same amount? Id understand if it was a 5% or 10% but a 100% penalty?

I'm a small solo business, and it seems HMRC have no interest in working with small independents.

Jay

There should be a clear explanation of a *penalty* of 100% if that is what has happened.

 

[David Griffiths]

You say that it's the same amount as you owe in VAT. Does that mean that you haven't actually paid the VAT on the first return? Is this a demand for oustanding tax rather than a penalty?

Late registration penalties are a percentage of the tax due, so it can't be that. It's very difficult to work out what you have without seeing it, and you could be misunderstanding what the notice actually is.

 

[DWS]

Late registration penalties are a percentage of the tax due, so it can't be that.

Why?
If OP has a penalty of the same amount as the VAT due then it is a 100% penalty so why could it not be that?

 

[David Griffiths]

Why?
If OP has a penalty of the same amount as the VAT due then it is a 100% penalty so why could it not be that?

Because the maximum penalty is 15%. HMRC link

 

[DWS]

Because the maximum penalty is 15%. HMRC link

Compliance checks — penalties for failure to notify — CC/FS11

www.gov.uk

 

[David Griffiths]

Compliance checks — penalties for failure to notify — CC/FS11

www.gov.uk

My post referred specifically to late registration penalties, so the levels of other penalities are not relevant.

Is it not also the case that compliance penalties are only issued after an inspection, whether on site or remotely? The OP has not mentioned that there has been any inspection, and of course if there had been an inspection he or she would be aware of it. Whatever you think of HMRC I have never heard of them issuing a penalty like that completely out of the blue.

My earlier post asked if the OP had paid the VAT because on the limited information provided it seems to me that the most likely explanation is that the document is not a penalty at all but simply a demand for unpaid tax. He says "It's the same amount t as what I owe in VAT for the period." That to me suggests that the VAT
hadn't been paid

 

[DWS]

My post referred specifically to late registration penalties, so the levels of other penalities are not relevant.

Is it not also the case that compliance penalties are only issued after an inspection, whether on site or remotely? The OP has not mentioned that there has been any inspection, and of course if there had been an inspection he or she would be aware of it. Whatever you think of HMRC I have never heard of them issuing a penalty like that completely out of the blue.

My earlier post asked if the OP had paid the VAT because on the limited information provided it seems to me that the most likely explanation is that the document is not a penalty at all but simply a demand for unpaid tax. He says "It's the same amount t as what I owe in VAT for the period." That to me suggests that the VAT
hadn't been paid

I based my answer on what the OP asked which was
‘How can the penalty be the same as the VAT owed, as in 100%’
I did ask if the registration was prompted by HMRC but there has been no reply from OP, so all I have done is point out that 100% penalty is possible.
Unless the OP can give more details then any replies at this present time are merely guesswork.

 

[Newchodge]

May I point out that the only real information we have is from thre OP's original post. They have failed to answer any of the questions put to them. So speculation and argument about what may have happened is more than usually pointless.

 

[MyAccountantOnline]

Hi, I have recently received a VAT penalty which I don't understand. It's the same amount t as what I owe in VAT for the period.

I was late in registration for VAT but would this be why? How can the penalty be the same amount? Id understand if it was a 5% or 10% but a 100% penalty?

I'm a small solo business, and it seems HMRC have no interest in working with small independents.

Jay

Could you share an image of the penalty notice you have received blocking out your personal details?

Do also have a read of the HMRC notice which explains VAT penalties for late registration https://www.gov.uk/guidance/late-registration-penalty-for-vat-notice-70041