Readers’ forum: VAT penalty

I act for a client who did a stupid thing which HMRC has found out about and issued a 35% penalty for deliberate not concealed behaviour. My client is a service business and raises all sales invoices on the last day of each month. He has encountered cash flow problems because of coronavirus and decided to alter the parameter dates for his VAT returns by one day for his June and September 2020 returns.

In other words the June VAT return only declared invoices up to 29 June missing out all of his June invoices which were therefore declared on the September return which he also adjusted to include 30 June sales but exclude 30 September.

Bad luck meant that both periods when corrected had underpaid VAT of £12 000 and £8 000 respectively and the officer has assessed this tax...