SolvedVCP11155 | Breach of VAT Regulatory Provisions: Action to take with Regulatory Penalties: Issuing penalty warning letters
From HM Revenue & Customs · VAT Civil Penalties
In what circumstances should a warning letter be issued?
The warning letter may require the trader to correct breaches of the regulatory requirements already committed in addition to a requirement to adhere to the relevant regulatory provision in the notice period.
When a breach of a regulatory requirement has been identified a further warning letter should be issued where appropriate, when the breach has been corrected.
If a penalty assessment letter is issued a warning can be included in that letter. The further warning resets the clock for the purposes of VAT Act 1994 Section 76(2) and any further breach within 2 years of the date of the further warning letter will make the trader/non registered person liable to a regulatory penalty.
VAT Act 1994 Section 76(2) requires us to issue a warning letter to a trader or nonregistered person before a penalty can be assessed for the following breaches of theregulatory requirements
Section 69 (1) (c) – failure to keep records required by regulations, the failure to notify changes in registration particulars, and the failure to provide information or produce documents.
Section 69 (1) (d) – failure to comply with any requirement set out in regulations made under the Act (except for procedural rules for VAT Tribunals).
Section 69 (1) (e) – failure to comply with any requirement set out in a Treasury Order made under the VAT Act.
Section 69 (1) (f) – failure to comply with any requirement set out in regulations made under the European Communities Act 1972 relating to VAT.
A regulatory penalty can be assessed for these breaches within a period of 2 years after the issue of the penalty warning letter.