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HMRC Tax AppealsUnited Kingdom
Free VAT Penalty Points & New Penalty Appeal Letter Template
A VAT penalty points appeal is the formal route for challenging an HMRC £200 points-based late-submission penalty issued under the new Finance Act 2021 Schedule 24 regime which has been in force for United Kingdom VAT accounting periods beginning on or after 1 January 2023. Use our free UK template to appeal within the 30-day window, applying the Perrin v HMRC four-stage reasonable excuse defence, the Schedule 24 paragraph 14 special-circumstances reduction and the compliance-period reset under paragraph 8 across England, Wales, Scotland and Northern Ireland.
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VAT Penalty Points and New Penalty Appeal
Appeal Under The Finance Act 2021 Schedule 24 Points-based Regime · 14 May 2026
Riverside Joinery Limited
Unit 7, Mill Lane Industrial Estate, Derby DE21 4AB
01332 555701
finance@riversidejoinery.co.uk
14 May 2026
VAT Written Enquiries Team — HM Revenue and Customs
VAT Written Enquiries Team, HM Revenue and Customs, BX9 1WR, United Kingdom
VAT POINTS-BASED PENALTY APPEAL
Penalty Ref: VAT-PEN-2026-883401 | VAT: GB 412 8857 92
Dear Sir or Madam,
I write to appeal against the points-based VAT penalty issued by HMRC on 2 May 2026 (penalty reference VAT-PEN-2026-883401). The penalty was issued under the points-based late-submission penalty regime in Schedule 24 to the Finance Act 2021, which replaced the legacy VAT default surcharge for accounting periods beginning on or after 1 January 2023. The filing frequency is quarterly (threshold 4 points; 12-month compliance-period reset). The penalty relates to the VAT return for the accounting period 01/01/2026 to 31/03/2026 (quarter ending 31 March 2026), the statutory filing deadline for which was 7 May 2026; the return was in fact submitted on 12 May 2026. This appeal is lodged within the 30-day window prescribed by paragraph 25 of Schedule 24 (the prescribed appeal deadline is 1 June 2026). I rely on the reasonable excuse defence under paragraph 9 of Schedule 24. The factual basis is set out below.
I write to appeal against the points-based VAT penalty issued by HMRC on 2 May 2026 (penalty reference VAT-PEN-2026-883401). The penalty was issued under the points-based late-submission penalty regime in Schedule 24 to the Finance Act 2021, which replaced the legacy VAT default surcharge for accounting periods beginning on or after 1 January 2023. The filing frequency is quarterly (threshold 4 points; 12-month compliance-period reset). The penalty relates to the VAT return for the accounting period 01/01/2026 to 31/03/2026 (quarter ending 31 March 2026), the statutory filing deadline for which was 7 May 2026; the return was in fact submitted on 12 May 2026. This appeal is lodged within the 30-day window prescribed by paragraph 25 of Schedule 24 (the prescribed appeal deadline is 1 June 2026). I rely on the reasonable excuse defence under paragraph 9 of Schedule 24. The factual basis is set out below.
1.
TAXPAYER IDENTIFICATION
VAT-registered entity: Riverside Joinery Limited
Correspondence address: Unit 7, Mill Lane Industrial Estate, Derby DE21 4AB
VAT registration number: GB 412 8857 92
Telephone: 01332 555701
Email: finance@riversidejoinery.co.uk
Contact: Helen Carter (Finance Director)
Correspondence address: Unit 7, Mill Lane Industrial Estate, Derby DE21 4AB
VAT registration number: GB 412 8857 92
Telephone: 01332 555701
Email: finance@riversidejoinery.co.uk
Contact: Helen Carter (Finance Director)
2.
PENALTY UNDER APPEAL
Date of the penalty notice: 2 May 2026
Penalty notice reference: VAT-PEN-2026-883401
Amount of penalty: £200
Points awarded by the notice: 1 point (£200 fixed penalty triggered on threshold breach)
Cumulative points after the award: 4 points (threshold for quarterly filers)
Statutory framework: Schedule 24 to the Finance Act 2021 (points-based late-submission penalty regime).
Appeal deadline: 1 June 2026 (30 days from the date of the penalty notice).
Penalty notice reference: VAT-PEN-2026-883401
Amount of penalty: £200
Points awarded by the notice: 1 point (£200 fixed penalty triggered on threshold breach)
Cumulative points after the award: 4 points (threshold for quarterly filers)
Statutory framework: Schedule 24 to the Finance Act 2021 (points-based late-submission penalty regime).
Appeal deadline: 1 June 2026 (30 days from the date of the penalty notice).
3.
FILING HISTORY FOR THE PERIOD IN DISPUTE
Filing frequency: quarterly (threshold 4 points; 12-month compliance-period reset)
VAT accounting period concerned: 01/01/2026 to 31/03/2026 (quarter ending 31 March 2026)
Statutory filing deadline: 7 May 2026
Date the return was in fact filed: 12 May 2026
Statutory framework: Schedule 24 paragraphs 4 and 7 to the Finance Act 2021. Making Tax Digital for VAT has been mandatory for all VAT-registered businesses since 1 April 2022.
VAT accounting period concerned: 01/01/2026 to 31/03/2026 (quarter ending 31 March 2026)
Statutory filing deadline: 7 May 2026
Date the return was in fact filed: 12 May 2026
Statutory framework: Schedule 24 paragraphs 4 and 7 to the Finance Act 2021. Making Tax Digital for VAT has been mandatory for all VAT-registered businesses since 1 April 2022.
4.
BRIEF REASONABLE EXCUSE STATEMENT
The VAT return for the quarter ending 31 March 2026 was filed five days late because of a critical failure of the MTD bridging software (Sage 50 Cloud) on 5 May 2026 that prevented the return from being posted through the API endpoint until the software vendor released a patch on 11 May 2026. The return was filed within 24 hours of the patch being available. The taxpayer has taken reasonable steps under the Perrin objective test and the failure is properly attributable to a recognised MTD bridging-software failure category.
5.
REASONABLE EXCUSE — PERRIN FOUR-STAGE OBJECTIVE TEST
The Upper Tribunal in Perrin v HMRC [2018] UKUT 0156 (TCC) settled the four-stage objective test for the reasonable excuse defence. The test was developed under the predecessor penalty regimes and is carried across into Schedule 24 to the Finance Act 2021 by HMRC and the First-tier Tribunal. The four stages are:
Stage 1 — Facts asserted: establish the facts the taxpayer asserts give rise to a reasonable excuse.
Stage 2 — Objective assessment: consider whether, viewed objectively, those facts amount to a reasonable excuse for the default.
Stage 3 — Excuse ceased: identify the date on which any reasonable excuse ceased.
Stage 4 — Remedy without unreasonable delay: decide whether the taxpayer remedied the failure without unreasonable delay after that time.
Category of excuse relied on: failure of MTD-compatible accounting or bridging software that prevented timely electronic submission.
Stage 1 — Facts asserted:
Riverside Joinery Limited uses Sage 50 Cloud as its MTD-compatible accounting and bridging software for the VAT return submission. The return for the quarter ending 31 March 2026 was prepared and authorised by the Finance Director on 4 May 2026 — three days ahead of the 7 May 2026 statutory filing deadline. The first submission attempt was made on 5 May 2026 at 09:14. The Sage 50 Cloud API endpoint returned a malformed-payload error consistent with the Sage incident SAG-2026-04 reported on the same morning. The Finance Director immediately raised a support ticket (Sage ticket #SUP-983047) and a second support ticket on 6 May 2026. Sage confirmed the incident affected the May 2026 quarterly window and released a software patch on 11 May 2026 at 16:50. The return was filed using the patched software on 12 May 2026 at 09:30.
Stage 3 — Date the reasonable excuse ceased: 11 May 2026.
Stage 4 — Remedy without unreasonable delay:
After the Sage 50 Cloud patch was released at 16:50 on 11 May 2026 the Finance Director re-ran the validation and submitted the return at 09:30 on 12 May 2026 — within 17 hours of the patch becoming available. The total elapsed time between the excuse ceasing and the return being filed was less than one working day. The objective test in Perrin is satisfied.
Stage 1 — Facts asserted: establish the facts the taxpayer asserts give rise to a reasonable excuse.
Stage 2 — Objective assessment: consider whether, viewed objectively, those facts amount to a reasonable excuse for the default.
Stage 3 — Excuse ceased: identify the date on which any reasonable excuse ceased.
Stage 4 — Remedy without unreasonable delay: decide whether the taxpayer remedied the failure without unreasonable delay after that time.
Category of excuse relied on: failure of MTD-compatible accounting or bridging software that prevented timely electronic submission.
Stage 1 — Facts asserted:
Riverside Joinery Limited uses Sage 50 Cloud as its MTD-compatible accounting and bridging software for the VAT return submission. The return for the quarter ending 31 March 2026 was prepared and authorised by the Finance Director on 4 May 2026 — three days ahead of the 7 May 2026 statutory filing deadline. The first submission attempt was made on 5 May 2026 at 09:14. The Sage 50 Cloud API endpoint returned a malformed-payload error consistent with the Sage incident SAG-2026-04 reported on the same morning. The Finance Director immediately raised a support ticket (Sage ticket #SUP-983047) and a second support ticket on 6 May 2026. Sage confirmed the incident affected the May 2026 quarterly window and released a software patch on 11 May 2026 at 16:50. The return was filed using the patched software on 12 May 2026 at 09:30.
Stage 3 — Date the reasonable excuse ceased: 11 May 2026.
Stage 4 — Remedy without unreasonable delay:
After the Sage 50 Cloud patch was released at 16:50 on 11 May 2026 the Finance Director re-ran the validation and submitted the return at 09:30 on 12 May 2026 — within 17 hours of the patch becoming available. The total elapsed time between the excuse ceasing and the return being filed was less than one working day. The objective test in Perrin is satisfied.
6.
SPECIAL CIRCUMSTANCES — FA 2021 SCHEDULE 24 PARAGRAPH 14
Paragraph 14 of Schedule 24 to the Finance Act 2021 confers a discretion on HMRC to reduce a points-based penalty where the officer considers there are special circumstances. The discretion sits separately from the reasonable excuse defence in paragraph 9. The Upper Tribunal in HMRC v Hok Ltd [2012] UKUT 363 (TCC) confirmed there is no general fairness jurisdiction over statutory penalty regimes — the statutory routes (reasonable excuse and special-circumstances reduction) are the routes through which the appeal must run. Special circumstances must be more than the ordinary effects of complying with the new regime and must apply uncommonly to the taxpayer.
Special circumstances relied on:
In the alternative, and without prejudice to the reasonable excuse defence, the taxpayer relies on the special-circumstances power. The special circumstances are: (i) this is the first threshold breach under the FA 2021 Schedule 24 points-based regime since it came into force on 1 January 2023; (ii) the taxpayer has a substantively clean MTD compliance history; (iii) the underlying default is properly attributable to a documented software-vendor failure rather than to any conduct of the taxpayer; (iv) the £200 fixed penalty is disproportionate to the harm to HMRC where the return was filed within five days of the deadline and the VAT due has been paid in full.
First penalty under the new regime: the taxpayer has not previously breached the threshold under the Schedule 24 points-based regime. A clean prior record under the post-1 January 2023 regime is relevant to proportionality.
Special circumstances relied on:
In the alternative, and without prejudice to the reasonable excuse defence, the taxpayer relies on the special-circumstances power. The special circumstances are: (i) this is the first threshold breach under the FA 2021 Schedule 24 points-based regime since it came into force on 1 January 2023; (ii) the taxpayer has a substantively clean MTD compliance history; (iii) the underlying default is properly attributable to a documented software-vendor failure rather than to any conduct of the taxpayer; (iv) the £200 fixed penalty is disproportionate to the harm to HMRC where the return was filed within five days of the deadline and the VAT due has been paid in full.
First penalty under the new regime: the taxpayer has not previously breached the threshold under the Schedule 24 points-based regime. A clean prior record under the post-1 January 2023 regime is relevant to proportionality.
7.
POINTS REMOVAL AND 24-MONTH COMPLIANCE-PERIOD RESET
Paragraph 8 of Schedule 24 to the Finance Act 2021 provides that points expire after the relevant compliance period of clean filing — 24 months for monthly and annual filers, 12 months for quarterly filers — provided all outstanding returns are up to date and the threshold has not been reached. Where the taxpayer can demonstrate a substantively compliant history broken only by an excusable lapse, the points-removal argument supports both the reasonable excuse defence (paragraph 9) and the special-circumstances reduction (paragraph 14). It is also the route to a clean slate going forward without the cliff-edge effect of a further breach.
Compliance history relied on:
The taxpayer has a substantively compliant filing history. Of the last 12 quarterly returns (covering the period from 1 January 2023, when the new regime came into force), 11 have been filed on time. The single excusable lapse is the return in dispute. The taxpayer is otherwise fully compliant with the MTD for VAT regime — using an MTD-compatible bridging software, maintaining digital records, and using digital links throughout.
Points-removal argument:
The taxpayer respectfully invites HMRC to remove the disputed point from the taxpayer record under paragraph 8 of Schedule 24. Where the point is removed, the cumulative-points total drops from 4 to 3 and the threshold is not breached. The 12-month compliance-period reset would then begin to run from the next clean filing and the taxpayer would be on a clean trajectory through the rest of 2026 and into 2027.
Compliance history relied on:
The taxpayer has a substantively compliant filing history. Of the last 12 quarterly returns (covering the period from 1 January 2023, when the new regime came into force), 11 have been filed on time. The single excusable lapse is the return in dispute. The taxpayer is otherwise fully compliant with the MTD for VAT regime — using an MTD-compatible bridging software, maintaining digital records, and using digital links throughout.
Points-removal argument:
The taxpayer respectfully invites HMRC to remove the disputed point from the taxpayer record under paragraph 8 of Schedule 24. Where the point is removed, the cumulative-points total drops from 4 to 3 and the threshold is not breached. The 12-month compliance-period reset would then begin to run from the next clean filing and the taxpayer would be on a clean trajectory through the rest of 2026 and into 2027.
8.
CONCLUSION AND DETERMINATION SOUGHT
I respectfully ask HMRC to cancel the points-based penalty of £200 for the late submission of the VAT return for the period 01/01/2026 to 31/03/2026 (quarter ending 31 March 2026) and to remove the points associated with the notice from the taxpayer record. The reasonable excuse defence, the special-circumstances reduction, the points-removal / 24-month compliance-period reset position and (where applicable) the late-payment penalty interaction are relied on individually and cumulatively. Please acknowledge receipt of this appeal and notify me of the outcome in writing as soon as possible. If the appeal is declined I will request an internal review under section 49A of the Taxes Management Act 1970.
YOURS FAITHFULLY,
Helen Carter
Finance Director, Riverside Joinery Limited
Date: ____________________
AUTHORISED SIGNATORY
Helen Carter
Finance Director
Riverside Joinery Limited
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a VAT Penalty Points Appeal?
A VAT penalty points appeal is a written challenge to HMRC against a £200 fixed penalty triggered on a points-threshold breach under the new Finance Act 2021 Schedule 24 regime. The regime replaced the legacy default surcharge regime under section 59 of the VAT Act 1994 for VAT accounting periods beginning on or after 1 January 2023. Points are accumulated for late submissions — each missed quarterly return adds 1 point — and a £200 fixed penalty is triggered when the points threshold is reached: 2 points for annual filers, 4 points for quarterly filers (the standard MTD VAT cadence), 5 points for monthly filers.
Further £200 penalties apply for each subsequent late submission until the threshold is cleared. Points expire after 24 months provided all returns are up to date AND the threshold has not been reached. The compliance-period reset under Schedule 24 paragraph 8 requires clean filing for 24 months (monthly), 12 months (quarterly) or 24 months (annual). The 30-day appeal window runs from the date printed on the penalty notice. The HMRC postal address for VAT correspondence in the United Kingdom is VAT Written Enquiries Team, HM Revenue and Customs, BX9 1WR.
The Upper Tribunal in Perrin v HMRC [2018] UKUT 0156 (TCC) settled the four-stage objective test for the reasonable excuse defence — the test is carried across into Finance Act 2021 Schedule 24 paragraph 9. The Upper Tribunal in HMRC v Hok Ltd [2012] UKUT 363 (TCC) confirms that the First-tier Tribunal has no general fairness jurisdiction. Early First-tier Tribunal decisions (2024-2026) on the new regime apply Perrin to the £200 fixed penalty — recognised reasonable excuse categories include MTD bridging-software failure, HMRC online service outage, serious illness and bereavement. Late-payment penalties operate under Schedule 26 — 2 per cent at day 15, further 2 per cent at day 30, 4 per cent per annum daily accrual from day 31.
What's Covered in This Template
Our United Kingdom VAT penalty points appeal template builds a structured letter HMRC can act on quickly — taxpayer identification, the penalty notice and filing-history details, the brief reasonable excuse, the Perrin four-stage analysis, the special-circumstances reduction under paragraph 14, the compliance-period reset under paragraph 8 and the late-payment penalty Schedule 26 interaction.
HMRC VAT Written Enquiries Address (BX9 1WR)
Pre-fills the standard HMRC VAT correspondence address — VAT Written Enquiries Team, HM Revenue and Customs, BX9 1WR, United Kingdom — used across the United Kingdom for VAT penalty appeals.
Auto-Calculated 30-Day Appeal Deadline
Calculates the 30-day appeal deadline from the date of the HMRC penalty notice so the taxpayer can see at a glance whether the appeal is in time across England, Wales, Scotland and Northern Ireland.
Filing-Frequency Threshold Switch
Auto-selects the points threshold by filing cadence — 2 (annual), 4 (quarterly, the standard MTD VAT cadence), 5 (monthly) — and applies the correct compliance-period reset (24 / 12 / 24 months under paragraph 8).
Single-Penalty vs Multiple-Penalty Switch
Adjusts the letter framing depending on whether the appeal is against a single £200 threshold-breach penalty or against subsequent £200 penalties accruing while the threshold remains unmet.
Expert: Perrin Four-Stage Reasonable Excuse Test
Structures the reasonable excuse defence into the four stages required by Perrin v HMRC [2018] UKUT 0156 (TCC) — facts asserted, objective assessment, date the excuse ceased and remedy without unreasonable delay — applied to Schedule 24 paragraph 9 of the Finance Act 2021.
Expert: MTD Bridging-Software Failure Category
Engages the recognised reasonable excuse category for MTD bridging-software failure — particularly relevant since MTD for VAT became compulsory for all VAT-registered businesses from 1 April 2022. Early FTT decisions support this category.
Expert: FA 2021 Sch 24 para 14 Special-Circumstances Reduction
Independent HMRC discretion to reduce the penalty for special circumstances — first-time threshold breach, modest underlying VAT, system / process transition, vulnerable taxpayer, novelty of the new regime or other proportionality consideration.
Expert: 24-Month / 12-Month Compliance-Period Reset
Where compliance has been clean for the relevant period (24 months monthly / 12 months quarterly / 24 months annual), the points expire under Schedule 24 paragraph 8. The expert section evidences the clean filing record across the relevant compliance window.
Expert: Schedule 26 Late-Payment Cascade (2 / 4 / 4-per-annum)
Where the appeal includes a Schedule 26 late-payment penalty, the cascade — 2% at day 15, further 2% at day 30, 4% annual daily accrual from day 31 — is set out and the time-to-pay arrangement defence is signposted.
Expert: Internal Review + FTT Escalation (form T240)
Signposts the right to an HMRC internal review under TMA 1970 section 49A and the right to escalate to the First-tier Tribunal (Tax Chamber) via form T240 to PO Box 16972, Birmingham B16 6TZ.
Single Signer — Director, Partner, Sole Trader or Agent
The letter is signed by the authorised signatory in the right capacity — director for the British company, partner for the partnership, sole trader proprietor or 64-8 agent. No witness or notarisation is required for a VAT penalty appeal.
How to Appeal a VAT Penalty Points Notice
Follow these steps to produce a well-structured VAT penalty points appeal letter in a format HMRC and (if escalated) the First-tier Tribunal (Tax Chamber) accept across the United Kingdom.
- 1
Check the 30-Day Appeal Deadline
Note the date printed on the HMRC penalty notice. The appeal must reach HMRC within 30 days of that date. The template auto-calculates the deadline once you enter the notice date.
- 2
Confirm the Filing-Frequency Threshold
Annual filers — 2 points threshold. Quarterly filers (the standard MTD VAT cadence) — 4 points. Monthly filers — 5 points. The £200 fixed penalty is triggered on threshold breach. The template auto-adjusts the citation throughout.
- 3
Identify the Penalty Type — Single or Subsequent
A single threshold-breach £200 penalty, or subsequent £200 penalties accruing for each further late submission while the threshold remains unmet. The grounds and the available defences differ between the two.
- 4
Pick a Reasonable Excuse Category (Expert)
Recognised categories include MTD bridging-software failure; HMRC online service outage; serious illness; bereavement; adviser failure (with reasonable steps); IT failure unrelated to MTD; HMRC error; novelty of the new regime (Perrin); other unforeseen event.
- 5
Apply the Perrin Four-Stage Test (Expert)
Set out the facts asserted (stage 1); the objective assessment (stage 2); the date the excuse ceased (stage 3); and the remedy without unreasonable delay (stage 4). The four-stage framing is what HMRC and the First-tier Tribunal apply.
- 6
Engage the Special-Circumstances Reduction (Expert)
Independent of the reasonable excuse defence, Schedule 24 paragraph 14 of the Finance Act 2021 gives HMRC discretion to reduce the penalty for special circumstances — particularly relevant for first-time threshold breaches and where the underlying VAT is modest.
- 7
Engage the Compliance-Period Reset (Expert)
Where compliance has been clean for the relevant period, the points expire under Schedule 24 paragraph 8. Evidence the clean filing record for the relevant compliance window — particularly powerful where the threshold breach is a one-off after a long clean record.
- 8
Send to HMRC and Keep a Copy
Post to VAT Written Enquiries Team, HM Revenue and Customs, BX9 1WR, United Kingdom. Quote the VAT registration number on every letter. Keep proof of postage. HMRC aim to respond within 45 days.
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Legal Considerations — VAT Penalty Points Appeal
VAT penalty point appeals are governed by United Kingdom indirect tax statutes and HMRC published guidance. The framework operates the same in England, Wales, Scotland and Northern Ireland.
This template is for general information and does not constitute legal or tax advice. The Chartered Institute of Taxation (CIOT), the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA) regulate practitioners advising on complex VAT cases. The First-tier Tribunal (Tax Chamber) has the final word on the substantive reasonable excuse and special-circumstances arguments.
Reviewed for the United Kingdom
Statutory Framework — Finance Act 2021 Schedule 24
The new points-based regime sits in Schedule 24 of the Finance Act 2021 — in force for VAT accounting periods beginning on or after 1 January 2023. Paragraph 4 imposes the £200 fixed penalty triggered on threshold breach. Paragraph 7 sets the threshold by filing frequency (2 / 4 / 5). Paragraph 8 sets the compliance-period reset (24 / 12 / 24 months). Paragraph 9 contains the reasonable excuse defence. Paragraph 14 contains the special-circumstances reduction. Paragraph 25 sets the appeal and review route.
Late-Payment Penalties — Finance Act 2021 Schedule 26
Late-payment penalties operate separately under Finance Act 2021 Schedule 26. Paragraph 6 imposes a 2 per cent first penalty at day 15. Paragraph 7 imposes a further 2 per cent first penalty at day 30 (so 4 per cent in total if unpaid at day 30). Paragraph 8 imposes a 4 per cent annual second penalty (daily accrual from day 31). Time-to-pay arrangements arranged before day 15 prevent the first penalty; arrangements arranged before day 30 prevent the further 2 per cent. The reasonable excuse defence applies.
Perrin v HMRC — Four-Stage Objective Test
The Upper Tribunal in Perrin v HMRC [2018] UKUT 0156 (TCC) settled the test for reasonable excuse — the test is carried across into Finance Act 2021 Schedule 24 paragraph 9. The decision-maker must: (1) establish the facts the taxpayer asserts; (2) consider whether viewed objectively those facts amount to a reasonable excuse; (3) identify the date the reasonable excuse ceased; and (4) decide whether the taxpayer remedied the failure without unreasonable delay.
MTD for VAT — Compulsory Since 1 April 2022
Making Tax Digital for VAT became compulsory for all VAT-registered businesses from 1 April 2022 under Finance Act 2017 section 62 and SI 2018/261 as expanded by SI 2021/720. MTD requires digital record-keeping and submission via API-enabled software or bridging-software. The compulsory MTD status means software / bridging-software failure is now a recognised reasonable excuse category under Schedule 24 paragraph 9.
Compliance-Period Reset — Schedule 24 Paragraph 8
Where compliance is clean for the relevant period — 24 months for monthly filers, 12 months for quarterly filers, 24 months for annual filers — all accumulated points expire and the threshold resets. The reset operates automatically. The reset is particularly powerful where the threshold breach is a one-off after a long clean record — evidencing the clean record for the relevant compliance window strengthens both the reasonable excuse and the special-circumstances arguments.
FTT Escalation via Form T240
Where HMRC declines the appeal, the taxpayer can ask for an HMRC internal review under TMA 1970 section 49A. If the review remains adverse, the appeal goes to the First-tier Tribunal (Tax Chamber) by way of form T240 to PO Box 16972, Birmingham B16 6TZ, within 30 days of the review conclusion letter. The Tribunal decides the appeal de novo.
Frequently Asked Questions
Build Your VAT Penalty Points Appeal
Produce a clear, statute-cited letter HMRC can act on quickly. Whether the £200 penalty is the first threshold breach, a subsequent late submission while the threshold remains unmet or a Schedule 26 late-payment penalty, the template applies the Perrin four-stage objective test, engages the FA 2021 Schedule 24 paragraph 14 special-circumstances reduction, the compliance-period reset under paragraph 8 and signposts the FTT escalation route via form T240 to PO Box 16972, Birmingham B16 6TZ.
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