Breach of VAT Regulatory Provisions: Definition of Regulatory Penalties: Discretion
Regulatory penalties are assessed under the VAT Act 1994 Section 76 and as such are discretionary. You therefore have the discretion whether or not to assess for a penalty.
Having established the liability to the penalty you then need to decide if a penalty assessment should be made. When making this decision you will need to make sure you apply fair and equal treatment, taking
- full account of the circumstances of the particular case, and
- not forgetting that the fundamental objective of the penalty is to deter non- compliance.