Penalties for VAT and excise wrongdoing: in what circumstances is a penalty payable: when is a penalty chargeable
A penalty is chargeable if a person
- makes an unauthorised issue of an invoice showing or including VAT, see CH91350, or
- misuses a product listed at CH91500 in a way that attracts a higher amount of excise duty, see CH91400, or
- supplies a product listed at CH91500 knowing that it will be used for a purpose that attracts a higher rate of duty, see CH91450, or
- handles goods subject to unpaid excise duty, see CH91550.
However, we cannot charge a penalty where the person has a reasonable excuse, see CH92000, for non-deliberately
- issuing the invoice, or
- misusing the product, or
- handling the goods.
There cannot be a reasonable excuse for supplying a product knowing that it will be misused.
There is no liability to a wrongdoing penalty, where goods have been seized at importation from outside the EU. This is a consequence of the ECJ judgement in Dansk. In these cases the person may be liable to a civil evasion penalty, under section 8 of the Finance Act 1994.