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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for VAT and excise wrongdoing: other penalty issues: company and company officer penalties: deliberate wrongdoing attributable to an officer of the company

The fact that an officer, see CH98650, signs a document on behalf of the company, see CH98620, is not, in it self, evidence that the wrongdoing is attributable to that officer’s action.

During the course of your compliance check, you should examine the underlying actions or failures that eventually led to the deliberate VAT or excise wrongdoing, and record your findings.

This means that you must ask the officer or officers directly about their personal involvement and the circumstances that led to the deliberate wrongdoing or their potentially deliberate failure to take action to stop the wrongdoing occurring.

Before you start to ask them any questions about the wrongdoing you must make sure that the individual officer or officers are aware of their rights under Article 6 of the Human Rights Act, see CH300400.

Where there is evidence to identify the officer or officers whose actions or inactions caused the deliberate wrongdoing, these officer(s) will be liable for payment of all or part of the penalty when any of the specific circumstances below apply.

  • there is evidence that the officer gained or attempted to gain personally from the deliberate wrongdoing, see CH98660, or
  • the corporate body is insolvent, see CH98670, or
  • there are grounds to suspect that the corporate body may become insolvent, see CH98670.

There will be cases where there is no evidence of actual or attempted personal gain by the officer or officers whose actions gave rise to the wrongdoing. In those cases you should not pursue the officer or officers for payment of all or part of the penalty unless the company is insolvent or there are grounds to suspect that it may become insolvent.

FA08/SCH41/PARA22 (1) & (2)