Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Clerical or innocent error
Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after 01/04/2009. Misdeclaration penalty will still apply where the due date is before 01/04/2009.
Please see the Compliance Handbook CH80000 Penalties for Inaccuracies for further details.
This is a point frequently argued in reconsideration cases, but it does not constitute a reasonable excuse on its own. It is the reason for making the error that needs to be considered when deciding if an excuse exists.
The imposition of a misdeclaration penalty (MP) does not imply dishonesty on the part of the appellant.
If we consider there has been conduct involving dishonesty, HMRC will consider taking action under section 60 of the 1994 VAT Act.