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| <html lang="en"><head><meta charset="utf-8"><meta name="viewport" content="width=device-width,initial-scale=1"><title>VAT Relief Declaration Gap - UK Notice 701/7 exposure</title><meta name="description" content="Prices the zero-rated disabled-relief sales you cannot prove, before an HMRC officer does"><style>*{box-sizing:border-box} | |
| :root{color-scheme:light dark} | |
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| h1{font-size:1.05rem;margin:0 0 .2rem} | |
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| background:transparent;color:inherit;font:inherit} | |
| input[type=checkbox]{width:auto} | |
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| </head><body> | |
| <h1>How much is the missing paperwork worth to HMRC?</h1> | |
| <p class="sub">Prices the zero-rated disabled-relief sales you cannot prove, before an HMRC officer does</p> | |
| <label for="zero_rated_orders">Zero-rated disabled-relief orders in the period <span class="u">orders</span></label><input type="number" id="zero_rated_orders" data-k="zero_rated_orders" value="240" step="any"> | |
| <label for="missing_declaration_pct">Share with no signed eligibility declaration on file <span class="u">%</span></label><input type="number" id="missing_declaration_pct" data-k="missing_declaration_pct" value="35" step="any"> | |
| <label for="average_order_net">Average order value, excluding VAT <span class="u">GBP</span></label><input type="number" id="average_order_net" data-k="average_order_net" value="420" step="any"> | |
| <label for="vat_rate">Standard VAT rate that would have applied <span class="u">%</span></label><input type="number" id="vat_rate" data-k="vat_rate" value="20" step="any"> | |
| <label for="review_period_years">Years of sales history those orders cover <span class="u">years</span></label><input type="number" id="review_period_years" data-k="review_period_years" value="2" step="any"> | |
| <label for="months_since_due">Months since the earliest affected return was due <span class="u">months</span></label><input type="number" id="months_since_due" data-k="months_since_due" value="24" step="any"> | |
| <label for="penalty_behaviour">Inaccuracy penalty band (Schedule 24 FA 2007)</label><select id="penalty_behaviour" data-k="penalty_behaviour"><option value="No penalty (0%)">No penalty (0%)</option><option value="Careless unprompted (15%)">Careless unprompted (15%)</option><option value="Careless prompted (30%)" selected>Careless prompted (30%)</option><option value="Deliberate prompted (70%)">Deliberate prompted (70%)</option></select> | |
| <label for="interest_rate">HMRC late-payment interest rate <span class="u">%</span></label><input type="number" id="interest_rate" data-k="interest_rate" value="7.75" step="any"> | |
| <table><tr><th>Orders with no declaration, inside the window</th><td class="v" data-o="missing_declarations">—</td><td>orders</td></tr><tr><th>Years HMRC can still assess</th><td class="v" data-o="assessable_years">—</td><td>years</td></tr><tr><th>Net sales value at risk</th><td class="v" data-o="net_at_risk">—</td><td>GBP</td></tr><tr><th>VAT HMRC can assess</th><td class="v" data-o="vat_due">—</td><td>GBP</td></tr><tr><th>Inaccuracy penalty</th><td class="v" data-o="penalty_due">—</td><td>GBP</td></tr><tr><th>Late-payment interest</th><td class="v" data-o="interest_due">—</td><td>GBP</td></tr><tr><th>Total exposure</th><td class="v" data-o="total_exposure">—</td><td>GBP</td></tr><tr><th>Cost of one missing declaration</th><td class="v" data-o="cost_per_missing">—</td><td>GBP</td></tr></table> | |
| <div style="margin:14px 0;padding:12px 14px;border:1px solid #d6d6d6;border-radius:8px;background:#fafafa"><b>Take this working with you.</b><br>CSV export of every input and every line above for your accountant or an HMRC disclosure, plus a recheck reminder before your next VAT return. $60 once · one licence key per person or team seat · The average UK VAT consultant is paid GBP 22 an hour (Glassdoor, March 2026) and a practice bills that time out at several times the rate.<br><a href="https://getreadystack.com/api/buy/cl/polar_cl_d5zzFcjyQUofW6NWG9VQqY5bquD1bHgbq4M4t3lVGOf" style="display:inline-block;margin-top:8px;font-weight:600">Get CSV export and reminders — $60 →</a></div> | |
| <div class="f"><b>Missing-declaration exposure</b><br>Turns a count of zero-rated orders and the share with no signed eligibility declaration into the VAT, penalty and interest one HMRC assessment would carry.</div><div class="f"><b>4-year assessment window</b><br>Scales the order count down to the four years HMRC can still assess under s.77 VATA 1994, so a six-year sales history is not priced as if all of it were at risk.</div><div class="f"><b>Schedule 24 penalty band</b><br>Applies the inaccuracy penalty band you pick - careless unprompted, careless prompted or deliberate prompted - to the VAT rather than to the sale value.</div><div class="f"><b>Late-payment interest clock</b><br>Adds simple interest at the HMRC rate for the months since the affected return was due; the rate has been Bank of England base plus 4% since 6 April 2025.</div><div class="f"><b>CSV export of the working</b><br>Writes every input and every line of the calculation to a .csv you can hand to your accountant or attach to a disclosure. Needs the $60 key.</div><div class="f"><b>Quarter-end recheck reminder</b><br>Sets a reminder to re-run the check before the next VAT return is filed, so the gap is found by you and not at inspection. Needs the $60 key.</div> | |
| <script>function compute(v){ | |
| function r2(x){ return Math.round(x*100)/100; } | |
| function num(x){ var n = parseFloat(x); return isFinite(n) ? n : 0; } | |
| var WINDOW_YEARS = 4; | |
| var years = Math.max(0, num(v.review_period_years)); | |
| var assessable_years = Math.min(years, WINDOW_YEARS); | |
| var in_window = years > 0 ? (assessable_years / years) : 0; | |
| var orders = Math.max(0, num(v.zero_rated_orders)) * in_window; | |
| var pct = Math.max(0, Math.min(100, num(v.missing_declaration_pct))); | |
| var missing = orders * pct / 100; | |
| var net = missing * Math.max(0, num(v.average_order_net)); | |
| var vat = net * Math.max(0, num(v.vat_rate)) / 100; | |
| var band = String(v.penalty_behaviour || '').match(/([0-9]+(?:\.[0-9]+)?)%/); | |
| var pen_pct = band ? parseFloat(band[1]) : 0; | |
| var penalty = vat * pen_pct / 100; | |
| var months = Math.max(0, num(v.months_since_due)); | |
| var interest = vat * (Math.max(0, num(v.interest_rate)) / 100) * (months / 12); | |
| var total = vat + penalty + interest; | |
| return { | |
| missing_declarations: Math.round(missing * 10) / 10, | |
| assessable_years: Math.round(assessable_years * 100) / 100, | |
| net_at_risk: r2(net), | |
| vat_due: r2(vat), | |
| penalty_due: r2(penalty), | |
| interest_due: r2(interest), | |
| total_exposure: r2(total), | |
| cost_per_missing: missing > 0 ? r2(total / missing) : 0 | |
| }; | |
| }</script><script>(function(){ | |
| function read(){var v={};document.querySelectorAll('[data-k]').forEach(function(el){ | |
| var k=el.dataset.k;v[k]=el.type==='checkbox'?el.checked:(el.type==='number'?parseFloat(el.value):el.value);}); | |
| return v;} | |
| function paint(){var r={};try{r=compute(read())||{};}catch(e){r={};} | |
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| })();</script> | |
| <section data-yj-install="free" style="margin:2rem auto 1rem;max-width:46rem;padding:1.25rem 1.25rem;border:1px solid #cfe3d6;border-radius:12px;background:#f6fbf8;font:16px/1.6 system-ui,-apple-system,Segoe UI,sans-serif"><h2 style="margin:0 0 .4rem;font-size:1.2rem">Install free</h2><p style="margin:0 0 .8rem;color:#41505f">Free for the file open in your editor - no key, no limit. The workspace sweep and the report ask for a key.</p><a href="https://microsoftedge.microsoft.com/addons/detail/mfndpdaccobacdalmmclbpbhnedhilbd" rel="noopener" data-yj-install-door="edge" onclick="try{navigator.sendBeacon('/api/ev',new Blob([JSON.stringify({t:'install',slug:'vat-relief-declaration-gap-uk',src:'edge',path:location.pathname})],{type:'application/json'}))}catch(e){}" style="display:inline-block;margin:0 .5rem .5rem 0;padding:.6rem 1rem;border-radius:8px;background:#0f7b3f;color:#fff;text-decoration:none;font-weight:600">Microsoft Edge Add-ons</a></section> | |
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| <section data-yj="yj-facts-v1" style="max-width:920px;margin:48px auto 0;padding:0 20px;font-family:system-ui,sans-serif"><style>.yj-article p{font:400 15.5px/1.7 system-ui,sans-serif;color:#26313b;margin:0 0 12px;max-width:72ch}.yj-article h2,.yj-article h3,.yj-article h4{font:600 17px/1.35 system-ui,sans-serif;color:#1b1f24;margin:22px 0 8px}.yj-article table{border-collapse:collapse;margin:10px 0 16px;font:14px/1.45 system-ui,sans-serif}.yj-article th,.yj-article td{border:1px solid #e2e6ea;padding:6px 10px;text-align:left}.yj-article th{background:#f4f6f8}.yj-article pre{background:#0f1720;color:#e6edf3;padding:12px 14px;border-radius:8px;overflow:auto;font:13px/1.5 ui-monospace,Menlo,monospace}.yj-article code{font:13px ui-monospace,Menlo,monospace;background:#f1f3f5;padding:1px 4px;border-radius:3px}.yj-article pre code{background:none;padding:0}.yj-article ul,.yj-article ol{font:15px/1.6 system-ui,sans-serif;color:#26313b}</style><p style="font:400 13px/1.5 system-ui,sans-serif;color:#6b7680;margin:0 0 14px"><time datetime="2026-09-16">Updated 2026-09-16</time> · ReadyStack</p><script type="application/ld+json">{"@context":"https://schema.org","@type":"WebPage","dateModified":"2026-09-16","author":{"@type":"Organization","name":"ReadyStack"}}</script><h2 style="font:600 21px/1.3 system-ui,sans-serif;margin:0 0 6px;color:#1b1f24">Worked example</h2><p style="font:400 14.5px/1.5 system-ui,sans-serif;margin:0 0 16px;color:#5b6570">Real numbers from this tool, line by line.</p><div class="yj-article"><p><img src="https://getreadystack.com/img/promo/sku82534_result_card.jpg" alt="VAT Relief Declaration Gap - UK Notice 701/7 exposure" loading="lazy" style="max-width:100%;border-radius:6px"></p> | |
| <p>£10,266. That is what 84 missing pieces of paper cost a mid-sized UK mobility retailer — 240 zero-rated orders over two years, 35% of them with no signed eligibility declaration on file, £420 average net order value. Not a fine for selling the wrong thing. A bill for not being able to prove you sold it to the right person.</p> | |
| <p>VAT Notice 701/7 lets you zero-rate goods supplied to a chronically sick or disabled customer for their domestic or personal use: wheelchairs, stairlifts, incontinence products, adjustable beds, adapted vehicles, the bathroom you rebuilt for someone who cannot use a bath. The notice also puts the burden of proof on you, the supplier. The customer signs an eligibility declaration saying they are disabled and the goods are for their own use, and you keep it in your records. When a VAT officer visits, the declaration is the evidence. Without it, the supply is standard-rated, and the 20% you never charged comes out of your margin.</p> | |
| <p>The gap is almost never fraud. It is a phone order on a busy Friday, a form emailed and never returned, a declaration filed in the customer's folder instead of with the invoice. Every one of those looks like a clean zero-rated sale in your accounts. It only becomes a number when an officer samples orders and works outward from what is missing.</p> | |
| <p>Here is the part most people get wrong when they try to estimate the damage in their head. It is not just the VAT.</p> | |
| <p><strong>The VAT.</strong> 84 undocumented orders at £420 net is £35,280 of sales that should have carried 20%: £7,056.</p> | |
| <p><strong>The penalty.</strong> An inaccuracy in a return carries a penalty under Schedule 24 of the Finance Act 2007, as a percentage of the tax — careless and unprompted can fall to nothing, careless after HMRC comes knocking runs to 30%, deliberate goes to 70%. At the careless-prompted band, that is another £2,116.80. Note where the percentage lands: on the VAT, not on the sale value. Applying it to the sale is the single most common mistake in a back-of-the-envelope estimate, and it inflates the number fivefold.</p> | |
| <p><strong>The interest.</strong> Late-payment interest has been the Bank of England base rate plus 4% since 6 April 2025, and has stood at 7.75% since 9 January 2026. Over 24 months on £7,056, that is £1,093.68 — and it keeps running while you decide what to do.</p> | |
| <p><strong>The window.</strong> HMRC can assess four years back under s.77 of the VAT Act 1994. That cuts both ways: a shop with six years of thin paperwork is not assessed on all six, but a shop with two years of it is fully exposed. Scaling the order count to the window is the difference between a realistic figure and a panic.</p> | |
| <p>Total: £10,266.48. Divide by 84 and every missing declaration is worth £122.22 — which is the number that changes behaviour on the shop floor: a price on the thirty seconds it takes to get a form signed.</p> | |
| <p>Run your own figures: the free browser tool below takes the order count, the missing-declaration share, your average net order, the penalty band, the interest rate and the years of history, and returns all of it — no key, no limit, no locked result. A chatbot will not do this for you; it does not know your order count, it does not apply the four-year cap, and it will happily put the penalty on the sale value. A generic VAT calculator adds 20% to one line.</p> | |
| <p>Two things to do this week. Pull twenty zero-rated orders at random and check whether the signed declaration is actually in the file — that sample gives you the percentage to type in. Then run the number before the next return: an unprompted disclosure sits in a lower penalty band than one made after HMRC finds the gap.</p></div><h2 style="font:600 21px/1.3 system-ui,sans-serif;margin:34px 0 6px;color:#1b1f24">Questions people ask</h2><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What does this extension actually work out?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">It prices the zero-rated sales you cannot prove. You fill eight boxes: order count, the share with no signed declaration, average net order, VAT rate, years of history, months since the return was due, penalty band and interest rate. It returns eight lines, including the VAT HMRC can assess, the Schedule 24 penalty, the interest, the total and what one missing form costs.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">Who is this for?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">UK retailers who zero-rate goods for chronically sick or disabled customers under VAT Notice 701/7: mobility and stairlift dealers, incontinence and daily-living-aid suppliers, adapted-vehicle converters, and the bookkeepers and accountants who file their VAT returns and get asked how bad a missing declaration really is.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">Why will a chatbot or a free VAT calculator not do this?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">A generic VAT calculator adds 20% to one sale. A chatbot does not know your order count, your missing-declaration rate, or that HMRC can reach back four years under s.77 VATA 1994, and it applies the penalty to the sale value rather than to the VAT. This tool compounds all four in the order an assessment does.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What is free and what needs the key?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">Every calculation is free, unlimited and needs no key: the popup and the web page give you the full exposure and the per-declaration cost. The $60 licence key adds ownership and repetition - CSV export of the whole working for your accountant or a disclosure, and a recheck reminder before your next return.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What would it cost to have a person do this?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">The average UK VAT consultant is paid about GBP 22 an hour according to Glassdoor in March 2026, and a practice bills that time out at several times the rate. Matching 240 orders to signed declarations and pricing the gap by hand is most of a working day, before anyone writes the disclosure.</p></details><script type="application/ld+json" data-yj="yj-faq-ld">{"@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{"@type": "Question", "name": "What does this extension actually work out?", "acceptedAnswer": {"@type": "Answer", "text": "It prices the zero-rated sales you cannot prove. You fill eight boxes: order count, the share with no signed declaration, average net order, VAT rate, years of history, months since the return was due, penalty band and interest rate. 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