Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Reducing the penalty: Telling
- admitting the wrongdoing
- disclosing the wrongdoing in full
- explaining how and why the wrongdoing arose.
What is important are the timing, nature and extent of the telling of the disclosure.
- The timing is relevant to the period between the wrongdoing and the disclosure. In situations where the taxpayer has taken a significant period to correct the position (normally around 3 years, or less where the overall disclosure covers a longer period) they may not receive the full reduction.
- The nature covers why the wrongdoing occurred. The person needs to show a positive approach to telling what has happened not just reacting to questions.
- The extent is whether everything is disclosed to us. If there is only a partial disclosure then a full reduction will not be due. There is an overlap here with ‘helping’ - a disclosure that makes no reference to the scale of a wrongdoing is not a complete disclosure.
Overall, the telling to you about the disclosure must be positive and as complete as possible.