Tag Archives: VAT-penalty-mitigation

HMRC internal manual: VAT Assessments and Error Correction update

By   21 October 2024
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HMRC’s manual VAT Assessments and Error Correction was updated on 15 October 2024.

This internal guidance is for HMRC inspectors (but is equally useful for advisers) covers assessments and error correction. The amendments apply mainly to General assessment procedures: Importance of avoiding delay.

The manual covers:

  1. Making Tax Digital for Business (MTD) – how to deal with MTD customers
  2. Powers of assessment
  3. VAT assessments
  4. Error correction for VAT
  5. How to assess and correct
  6. “VALID” computer printouts
  7. Demand for VAT
  8. Remission of tax

It also refers to for the most up-to-date guidance on reasonable excuse CH160000.as a defence against penalties and interest.

More on:

How to avoid MTD penalties

Disclosure of Avoidance Schemes – new rules

New HMRC guidance on error reporting

New online service for error correction

Error Disclosure under £10,000 – Draft Letter To HMRC

 

 

 

VAT: How to remove penalty points under the new system

By   9 January 2023
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HMRC has introduced new penalty and interest rules for late returns and payments from 1 January 2023. Details here.

On 4 January 2023 HMRC published guidance on how to remove these points to avoid a penalty. This is particularly important if a business has reached the penalty point threshold.

The penalty thresholds are:

  • annual returns – 2 points
  • quarterly returns – 4 points
  • monthly returns – 5 points

If a business is at the limit and has the maximum points allowed for its accounting periods, it can remove them by meeting two conditions which are:

  • to complete a period of compliance, submitting all returns by the deadline
  • to submit all outstanding returns for the previous 24 months

The guidance sets out how these tests are calculated and applied.