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HMRC internal manual

VAT Civil Penalties

Unauthorised issue penalty: Unauthorised Persons definitions: Legal definition of an Unauthorised Person

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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(2) of the VAT Act 1994 defines a person who is not authorised to issue a VAT invoice.

An unauthorised person is anyone who does not meet one or more of the following criteria. They are not

  • registered for VAT under the VAT Act 1994
  • a corporate body treated as a member of a group for the purposes of Section 46(a) of the VAT Act 1994
  • an individual treated as a taxable person under the regulations at Section 46 of the VAT Act 1994
  • a person authorised to issue an invoice under regulations made under paragraph 2(12) of Schedule 11, VAT Act 1994
  • a person acting on behalf of the Crown.

Section 67(7) of the VAT Act 1994 defines a person who is not authorised to issue VAT invoices under the Flat Rate Farmers Scheme, see V1-28 Registration.

An unauthorised person operating under the scheme is described in this section as a person who is not for the time being authorised to do so for the purposes of Section 67(7).

Note: Section 67(7) of the VAT Act 1994 (formerly section 15(3) of the Finance Act 1985) was inserted on 16 July 1992 by the Finance Act 1992 and relates, in part, to traders certified under the Flat Rate Farmers Scheme.

Such traders are not registered for VAT in the normal way but can issue flat rate farming invoices charging VAT at 4%. The VAT charged at 4% can be treated as input tax if the trader receiving the supply is registered. Guidance on the Flat Rate Farmers Scheme can be found in V1-23 Schemes.