VPDS132040 - Vaping Products Duty and Vaping Duty Stamps: Financial guarantees: Waiver criteria: Meaning of 'adverse compliance history'

Debt History

If the trader is in debt to HMRC at the time they apply for the waiver, then they will not qualify. They will also not qualify if any of the following apply:

  • there is a current time to pay (TTP) agreement in place
  • the trader has not adhered to the conditions of any TTP agreement (such as making payments on time etc.)
  • there is a debt not currently under appeal
  • there has been a Field Force/Bailiff visit in the last 2 years
  • there have been 2 or more Debt Management actions within the last 3 years (this could include letters chasing a debt)
  • the business is a continuing trader and has a write off amount outstanding

Offence History

If there are serious offences (proven or charged) on record with HMRC, then the trader will not be eligible. This can include civil or criminal offences.

By serious offence we mean significant non-compliance which goes beyond accidental or innocent mistakes, such as being charged a deliberate behavioural penalty, or a conviction in court for any HMRC offence.

Existing excise traders

If the trader is an existing excise trader and has other approvals where deferment accounting has been used, then you should review the deferment account history to ensure that there is no more than one default in their payment history in the last 12 months.

You should also consider their returns – these should all have been filed on time and without issue; likewise, any payments due should have been rendered by the due date.

VAT compliance history

You should review their history and take into account:

  • any errors made on VAT returns, and their frequency
  • whether VAT returns have been rendered by the due date
  • any assessments raised against missing VAT returns (either as the result of compliance activity or centrally)
  • any large or frequent under-declarations of VAT in the last 3 years – if the trader has any then they will not qualify for the waiver
  • any default surcharges incurred in the previous 12 months – if the trader has any, they will not qualify for the waiver

Financial viability

The trader will not be eligible for the waiver if the business is in any of the following:

  • administration
  • liquidation
  • insolvency
  • backruptcy
  • receivership
  • financial difficulties (TTP arrangements etc.)

Liquidity risk assessment

The trader may be required to submit the previous 2 years audited accounts. From these you should take into account the business, profitability, level of fixed tangible assets, debts, loans, creditors and debtors.

You should also consider the last 12 months international trade operating history and/or the last 12 months excise return and payment history, if appropriate.

Additional checks

If you identify that there is a perceived risk to the revenue, then external credit checks can be made against the business (for example, Equifax).