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HMRC internal manual

Compliance Handbook

Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Potential Lost Revenue: What is Potential Lost Revenue

The amount of potential lost revenue (PLR) for a VAT or excise wrongdoing is

  • the amount shown or included as VAT where a person makes an unauthorised issue of an invoice, or
  • the amount of excise duty that is due to HMRC as a result of the wrongdoing, or
  • for Landfill Tax wrongdoings, the amount of tax due on the taxable disposal.

Where you calculate the PLR for a person’s (P’s) VAT or excise wrongdoing, you do not take into account any VAT, excise duty or Landfill Tax overpaid by another person because of P’s wrongdoing. The only exception to this is where that other person is allowed to adjust their tax liability by reference to P’s liability.

See page CH94300 for examples.