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HMRC internal manual

VAT Civil Penalties

Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Imports

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after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

  • Was the trader a regular importer?
  • Did the trader hold the necessary evidence required to deduct input tax as set out in the relevant guidance/public notice?
  • Was the correct tax point used?
  • If the previous two points do not apply, was alternative evidence held which could reasonably be accepted for input tax deduction?
  • If alternative evidence was used, was there supporting evidence of release from Customs control, delivery, payment etc. with which the trader can justify the date at which input tax has been deducted?
  • Was there a duplication of input tax claimed based on different evidence of importation?