Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Complex liability
Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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.
The following questions should be addressed when considering reasonable excuse
- Is the size of the trader relevant?
- Was the subject covered satisfactorily in a Public Notice or VAT leaflet?
- Was the subject of the assessment part of the trader’s main business activity?
- What steps had been taken to confirm the liability? Had this been checked with the National Advice Service or accountants etc?
- Had the error continued for some time and not been corrected on previous control visits?
- Had any liability change been widely publicised e.g. through VAT notes, or the media?
- Should the trader have been familiar with the transaction?
- How easy was it for the officer to determine the correct liability?