If a person fails to comply with certain requirements imposed by VATA 1994 or regulations made under that Act, he may be liable to a daily penalty at the prescribed rate (VATA 1994, s. 69). Although there is a possible penalty for failure to notify, for example changes in circumstances, in practice such a penalty is only assessed if VAT was lost due to such failure but usually there is no such loss. Thus, there is little need for apprehension when notifying changes, even some years after the event, although HMRC are given a better impression if they are notified under the law. Such impressions may count in deciding whether to examine a person's VAT records in detail.

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