Taxpayer’s responsibility

Late registration penalty

In January 2015 the taxpayer’s agent applied for the taxpayer to be registered for VAT because it had exceed the compulsory threshold in July 2014. HMRC said it should have registered by the end of August 2014 and may have incurred a ‘failure to notify’ penalty. This can be reduced from 30% of the potential lost revenue to zero if the taxpayer provides HMRC with information it requests.

In February 2015 HMRC wrote to the taxpayer requesting information on the amount of tax owed in the period but the taxpayer failed to respond until October 2015 by which time HMRC had issued a penalty for £1 472. This was the maximum 30% penalty discounted by 55%.

The taxpayer appealed. He said HMRC should have written to or at least copied in his adviser for the information because a 64-8 had been...