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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for VAT and Excise Wrongdoing: Types of wrongdoing: Three types of wrongdoing

If a person commits a VAT or excise wrongdoing, see CH91200, they will be liable to a penalty. See CH92000 if the person has a reasonable excuse for a non-deliberate wrongdoing.

There are three types of wrongdoing.

A wrongdoing by a person may be

  • deliberate and concealed if the failure is deliberate and arrangements were made to conceal it, see CH93100, or
  • deliberate but not concealed if the failure is deliberate but no arrangements were made to conceal it, see CH93200, or
  • non-deliberate, see CH93300.

Penalties for VAT and Excise wrongdoing are designed to address the behaviour that led to the wrongdoing.

Not every wrongdoing will result in a penalty. See CH92000 if the person has a reasonable excuse for a non-deliberate wrongdoing. But penalties for deliberate wrongdoing will be higher than those which are non-deliberate.

Within the deliberate category the law provides for higher penalties in the most serious cases where the person has taken steps to conceal the deliberate wrongdoing.

FA08/SCH41/PARA5