RCB/52/09 Guidance on VAT and Excise Wrongdoing penalties published
Revenue & Customs Brief, Issue 52. 24 August 2009
This Business Brief outlines the VAT and Excise wrongdoing penalties contained in the 2008 Finance Act (FA 2008). There is full technical guidance on these and other penalties introduced in FA 2007 and FA 2008 in HMRC's Comliance Handbook. The guidance on these particular penalties can be found at CH90000 onwards.
Under the review of HMRC's powers, deterrents and safeguards legislation has been introduced to align and modernise the framework under which HMRC administers the taxes and duties formerly handled by Customs and Excise and the Inland Revenue. The aim, developed through consultation, is to support those who seek to comply but come down hard on those who seek an unfair advantage through non-compliance.
HMRC inherited a number of different penalty regimes from Customs and Excise and the Inland Revenue. The law and practice relating to penalties varied not only between the two former departments but also between the various taxes and duties for which each department was responsible.
Finance Act 2007 s 97 and Sch 24 introduced a simpler and more consistent penalty system for inaccuracies in tax returns and other documents.
Finance Act 2008 s 123 and Sch 41 has extended and adapted the new penalty framework to introduce:
— In paragraph 1 of Sch 41, a standard penalty regime across most HMRC taxes where a customer fails to register or notify us and as a result tax is due
— In paragraphs 2, 3