Penalties ― import VAT

Produced by Tolley
Penalties ― import VAT

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Penalties ― import VAT
  • What penalties can be levied in respect of import VAT failures?
  • Customs civil evasion penalty for evading import VAT
  • What constitutes evading import VAT?
  • Can directors or managing officers be liable for the penalty?
  • How is the amount of import VAT evaded calculated?
  • What penalty can be levied?
  • Can the penalty be reduced?
  • How is the penalty assessed?
  • Contravention penalty
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of penalty that can be levied if a person does not accurately declare the amount of import VAT due.

What penalties can be levied in respect of import VAT failures?

Import VAT is VAT chargeable and paid on goods imported into the UK. It is calculated and paid based on the information provided on import documentation.

Penalties for inaccuracies in the amount of import VAT declared are charged under FA 2003, Part 3. However, subject to the usual recovery rules, import VAT is recovered as input tax on the importer’s VAT return. If a business claims too much import VAT or submits a claim too early, the business may be liable for a penalty for that inaccuracy under FA 2007, Sch 24. See the Penalties for inaccuracies in returns ― overview guidance note for more information.

Businesses can be subject to a penalty for evading import VAT where:

  1. the person engages in any conduct for the purpose of ‘evading import VAT’, and

  2. the person’s conduct involves dishonesty (whether or not this gives rise to any criminal liability)

Businesses can also be liable to a civil penalty for a contravention of customs law which also covers incorrectly claimed import VAT.

This guidance note covers situations where the person could be liable to a civil penalty for evading import VAT and for contravening customs law.

Customs civil evasion penalty for evading import VAT

Businesses can be subject to a penalty for evading import VAT where:

  1. the person engages in any conduct for

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