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KEY POINTS
- Penalties for late notification.
- Transfer of a going concern.
- Lack of proportionality.
- First-tier Tribunal decision in Wells.
Most people would agree that it is reasonable to penalise businesses that fail to register for VAT on time either deliberately or through carelessness but HMRC are now using the belated notification penalty to impose large penalties on businesses that have simply failed to notify them of a change of legal entity.
Such a change should be notified to HMRC no later than 30 days after the event.
It is useful to recap on the current system. From 1 April 2010 a new penalty for late registration was introduced (FA 2008 Sch 41) that effectively mirrored the penalty regime introduced on 1 April 2009 using the same four categories: reasonable...
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