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HMRC internal manual

Compliance Handbook

Penalties for VAT and excise wrongdoing: other penalty issues: agent acting: introduction to agent acting

We may charge a penalty where a person

  • makes an unauthorised issue of an invoice showing or including VAT, see CH91350, or
  • misuses a product listed at CH91500 in a way that attracts a higher amount of excise duty, see CH91400, or
  • handles goods on which excise duty is unpaid and not deferred, see CH91550, or
  • has a reasonable excuse for one of these wrongdoings which they do not remedy without unreasonable delay after the excuse has ended, see CH92400. This failure effectively transforms the wrongdoing into a non-deliberate one.

In each case, the law refers to the action or inaction of the person, alone.


Where an agent is acting for the person (P) the scope of those provisions is widened.

P may be charged a penalty where

  • the unauthorised issue of an invoice showing or including VAT was made by another person acting on P’s behalf, or
  • the misuse of the product was by a person acting on P’s behalf, or
  • the handling of the goods was made by a person acting on P’s behalf.

We can charge P a penalty whether the wrongdoing by the agent was deliberate or not. But if P satisfies us that they themselves took reasonable care to avoid the wrongdoing, there will not be a penalty, see CH98250.

For further guidance on the relationship between a person and an agent, see CH98200.

Where you suspect that a tax agent has engaged in dishonest conduct, see technical guidance starting at CH180000 and operational guidance starting at CH880000. Where you identify other types of poor agent behaviour, see CH800000.