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HMRC internal manual

Compliance Handbook

Penalties for VAT and Excise Wrongdoing: Types of wrongdoing: Onus of proof

It is for you to show, based on the evidence gathered, that there has been a VAT or excise wrongdoing.

You should tell the person that they may be liable to a penalty as soon as you become aware of it, even if you have not yet established the seriousness of the behaviour that gave rise to the penalty, see CH433040.

It is particularly important that you do not discuss the seriousness of the behaviour that has led to the penalty until you have established all the facts. Once you have established all the facts you must explain why the person’s actions meant, or led you to conclude, that the failure was deliberate, or not.

You should then invite the person’s comments. If this is dealt with at a meeting the notes of the meeting should record fully what you said and the person’s response.

If during a telephone conversation you become aware that penalties may be due, you should explain and then follow this up by putting your reasons in writing to the person.

Where a penalty is due it is important that you explain to the person what has gone wrong and how they can correct it in the future.

It is important that you do not compromise the person’s rights under the Human Rights Act. You should follow the procedures at CH433000.