Civil penalties

V5.331 Introduction

Origin of the civil penalty regime

The Keith Committee under the chairmanship of Lord Keith of Kinkel was set up to review the enforcement powers of the Revenue departments. As far as VAT was concerned it had become apparent that many traders were using the tax they collected as an interest-free loan until defaults were discovered as a result of a (then) Customs and Excise control visit. However, only in the most serious cases were proceedings instituted under the criminal penalty regime.

The Keith Committee recommended the implementation of a system of automatic, tax-geared civil penalties for a wide range of defaults, errors and omissions by taxpayers and the repeal of a number of offences. The intention was that there

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