VATREC16033 | Other Invoicing arrangements for particular businesses: Cash and carry wholesalers: Non-compliance by wholesaler

If a wholesaler does not comply with all the terms of these arrangements, the deficiencies in their procedures should be brought to their attention, in writing. They should be warned that, unless these deficiencies are put right, they will be required to issue normal VAT invoices. If they ignore the warning and continue to operate as before, you will need to consider the imposition of a civil penalty for a breach of regulatory provisions - VCP11100 - Breach of VAT Regulatory Provisions - HMRC internal manual - GOV.UK provides guidance on imposing the penalty.