Penalties for VAT and Excise Wrongdoing: Types of wrongdoing: Deliberate but not concealed - Examples
Derek Trotter has been using red diesel acquired for his construction company in his car. Derek fuels his car from the on-site red diesel tank each time before he leaves when there is nobody else at the site.
Derek is aware that red diesel should not be used in ordinary road vehicles but chooses to do this. It is a deliberate act. However Derek has made no attempt to conceal his activities beyond filling the car when there is nobody on-site.
Gerda runs a small upholstery business. She is not registered for VAT because her turnover is below the registration threshold. A local property developer asks her to do a large job but he insists on a VAT invoice. The contract price is not large enough to take Gerda over the registration threshold, but she can’t afford to lose the work simply because she can’t give the developer a VAT invoice. She knows she should not issue an invoice showing VAT but she deliberately chooses to do so and has to include a false VAT registration number to give it authenticity. She leaves the copy invoice in her records and it is clear for the VAT officer to see.