VCP10787 | Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Deregistered traders

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after 01/04/2009. Misdeclaration penalty will still apply where the due date is before 01/04/2009.

Please see the Compliance Handbook CH80000 Penalties for Inaccuracies for further details.

The following questions should be addressed when considering reasonable excuse

• Has the trader in the process of deregistration declared the value of stocks and assets on the application form but omitted the output tax from the final return?

• Has the trader been misled by the terms of paragraph 7 of the VAT Notice 700/11/90 (note: the omission in that notice was corrected in later prints)?

• Has the trader received a letter or visit explaining the deregistration procedures (including stocks and assets)?