It has been reported that nearly half of VAT fines against businesses are levied incorrectly.
HMRC issued 17,200 automatic penalties for late filing of VAT in 2013 and approximately 49% were overturned when taxpayers requested a review.
HMRC’s internal review system, which was set up in 2009, re-examines VAT decisions imposed on businesses in relation to tax disputes and the late filing or payment of tax.
HMRC’s computer based system automatically imposes a fine if a VAT return is filed after the deadline regardless of circumstances forcing taxpayers to make an appeal to fight the fine and prove good reason for the late filing.