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HMRC internal manual

Compliance Handbook

Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Reducing the penalty: Helping

Helping includes

  • giving reasonable help in quantifying the amount shown as VAT or excise duty due because of the wrongdoing
  • positive assistance as opposed to passive acceptance or obstruction
  • actively engaging in the work to accurately quantify the amount due
  • volunteering any information relevant to the disclosure.

In considering whether a person has given reasonable help, you should take account of the abilities and circumstances of the person.

What is important is the timing, nature and extent of the help the person provides to quantify the wrongdoing.

  • The timing relates to how soon the disclosure is made and the period over which the help is given. As well as there not being any avoidable delays there should be an active approach, providing information as early as possible.
  • The nature covers whether the help is useful and saves you time and effort in quantifying the amount due because of the wrongdoing. For the person to just appear to be helpful but not actually produce anything of use is not what is required. It includes help in bringing the compliance check to a speedy and accurate conclusion.
  • The extent of the help covers the whole period of the compliance check from start to finish and all aspects of the compliance check. If help is only received for part of the time or in certain aspects you would not give the full reduction.

Overall, helping you with quantifying the amount due must be as active as possible.

For example

  • Obtaining evidence capable of verification e.g. bank statements.
  • Attending meetings with you where that is the best way to both quantify the amount due because of the wrongdoing and test the disclosure.
  • Identifying relevant purchases and sales.