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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for VAT and Excise Wrongdoing: Types of wrongdoing: Deliberate and concealed - Examples

Example 1

Simon Fellows has been using the red diesel acquired for his farm machinery in his family car. He has used his brother-in-law’s diesel receipts in his business records to conceal the fact that he has not been buying ordinary diesel.

Simon knows that red diesel should not be used in ordinary road vehicles and yet chooses to do so. This is a deliberate act. He has concealed that act by using false invoices. So it is deliberate and concealed.

Example 2

Anita runs a small clothing alterations business. She is not registered for VAT because her turnover is below the registration threshold.

The city’s theatre asks her to do a large job but they insist on a VAT invoice. The contract price is not large enough to take Anita over the registration threshold, but she can’t afford to lose the work simply because she can’t give the theatre a VAT invoice. So it is deliberate and concealed.

She knows she should not issue an invoice showing VAT but she deliberately chooses to do so and therefore also has to enter a false VAT registration number on it. However, Anita then destroys her copy invoice and replaces it with one only showing the gross amount payable and no VAT registration number. Anita does not pay over the VAT to HMRC and has concealed the fact that she has to. So her behaviour is deliberate and concealed.