Penalties ― VAT wrongdoing ― overview

Produced by Tolley

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

  • Penalties ― VAT wrongdoing ― overview
  • What is a VAT wrongdoing?
  • What is a ‘person’?
  • What is the unauthorised issue of an invoice showing or including VAT?
  • What happens if a person acting as an agent is involved?
  • Relying on a third party
  • Company penalties

Penalties ― VAT wrongdoing ― overview

This guidance note provides an overview regarding when HMRC may impose a penalty on a person for VAT wrongdoing. This note should be read in conjunction with the Penalties ― VAT wrongdoing ― behaviour of the taxpayer and Penalties ― VAT wrongdoing ― calculating, assessing and collecting the penalty guidance notes. More information can be found in HMRC factsheet: CC/FS12.

It should be note that the ‘wrongdoing’ penalty also covers certain excise wrongdoings and knowingly permitting a disposal of material at an unauthorised waste site. These wrongdoings are not covered in this note as it only covers the specific VAT wrongdoing.

What is a VAT wrongdoing?

A person will be liable to a VAT wrongdoing penalty where that person makes an unauthorised issue of an invoice showing or including VAT where the person is not registered for VAT or is not authorised to issue an VAT invoice.

What is a ‘person’?

For the purposes of these penalty provisions a person is:

  1. an individual

  2. a company

  3. a partner

  4. a partnership

  5. a representative member of a VAT group

  6. a personal representative (this can be a lay person, a professional, or a corporate entity)

  7. a pension scheme administrator

  8. a trustee

  9. collectives, partnerships and cooperatives that come together as a group for the production of biofuel

  10. any single entry that has multiple VAT divisional registrations under VATA 1994, s 46(1). The individual registrations are 'component parts' of a single person

What is the unauthorised issue of an invoice showing or including VAT?

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