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HMRC internal manual

VAT Civil Evasion Penalty

From
HM Revenue & Customs
Updated
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Apportioning VAT civil evasion penalty: insolvency or incipient insolvency

Whether or not there has been personal gain, if the corporate body is in insolvency or suspected of incipient insolvency, you should apportion the penalty to the directors/managing officers/managing members for whom there is evidence of dishonesty. This applies even if it is suspected that it would be the imposition of the penalty that would cause the insolvency. You should obtain details of the insolvency or of the information which suggests that the corporate body is about to become insolvent.