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Please see the Compliance Handbook CH70000聽for more details about the new failure to notify penalty.

VAT Act 1994, Section 67(3)(a) provides that the period for determining 鈥榬elevant VAT鈥�, see VCP10451, for penalty purposes

• Begins on the date on which the trader was required to be registered

And

• Ends on the day before the date HMRC received notification of, or otherwise became fully aware of, the trader鈥檚 liability to be registered

This situation arises where HMRC become fully aware of the trader鈥檚 liability to register but the trader declines to complete a VAT1 form and compulsory registration action is taken

Note: See V1-28 Registration for details of compulsory registration action.

It does not apply to the situation where HMRC has received information from a third party that a person should be registered for VAT.

In this case the trader should be sent a VAT1 form according to the normal procedures or compulsory registration action should be taken.

A third party cannot take responsibility for registering another person for VAT. It is the sole responsibility of the potential trader to complete the registration details and sign the declaration on the VAT1 form.

A simple telephone call enquiring about registration or requesting a VAT1 form is not to be regarded as evidence of liability to register. Neither does it constitute 鈥榦therwise becoming fully aware of liability to register鈥�.

However the enquiry should be followed up and a VAT1 form sent or compulsory registration action taken where appropriate.

It is important that full details of enquiries from traders who should register are kept, see VCP10435.