Value Added Tax

Penalties ― VAT wrongdoing ― behaviour of the taxpayer

Produced by Tolley
  • 19 Oct 2021 11:30

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

  • Penalties ― VAT wrongdoing ― behaviour of the taxpayer
  • Three types of wrongdoing
  • Non-deliberate wrongdoing
  • Deliberate but not concealed wrongdoing
  • Deliberate and concealed wrongdoing
  • Onus of proof
  • Level of proof

Penalties ― VAT wrongdoing ― behaviour of the taxpayer

This guidance note provides an overview of the types of wrongdoing (taxpayer behaviour) that would be liable to a penalty. This note should be read in conjunction with the Penalties ― VAT wrongdoing ― overview and Penalties ― VAT wrongdoing ― calculating, assessing and collecting the penalty guidance notes.

Three types of wrongdoing

Currently, there are three types of wrongdoing (behaviour) that are liable to a penalty:

  1. non-deliberate

  2. deliberate but not concealed ― where the failure is deliberate but no arrangements were made to conceal it

  3. deliberate and concealed ― where the failure is deliberate and arrangements were made to conceal it

CH93050; FA 2008, Sch 41, para 5

Any penalties levied by HMRC in respect of VAT wrongdoing are intended to correct the behaviour that led to the wrongdoing. However, it should be noted that not every wrongdoing will result in the imposition of a penalty. If the person has a reasonable excuse for a non-deliberate wrongdoing, then they will not be liable to a penalty. However, the level of penalty imposed for deliberate wrongdoing will be higher than those which are levied in respect of a non-deliberate wrongdoing. The highest penalty will be imposed in situations where the person has taken steps to conceal the deliberate wrongdoing.

Non-deliberate wrongdoing

A non-deliberate wrongdoing is

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