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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Unauthorised issue penalty: Why a penalty arises: The legal power to impose a penalty

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008. The VAT and Excise Wrongdoing penalty applies where a person makes an unauthorised issue of an invoice on or after 01/04/2010. If an unauthorised invoice has been issued before 01/04/2010 the S 67 penalty will continue to apply.

Please see the Compliance Handbook CH90000 Penalties for more information about the VAT and Excise Wrongdoing penalty.

Section 67(1) ( c) of the VAT Act 1994 gives HMRC the power to impose a penalty on unauthorised persons who issue invoice(s) that show an amount as being Value Added Tax (VAT) or an amount attributable to VAT.

Section 67(1) tells you that a penalty can be imposed and the individual shall be liable, subject to subsections (8) and (9) of section 67 to

  • a penalty equal to the specified percentage of the relevant VAT, or
  • if the specified percentage of the relevant VAT is nil or less than £50, then a minimum penalty of £50 will be imposed.