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HMRC internal manual

VAT Civil Penalties

Unauthorised issue penalty: Discretion, reasonable excuse and mitigation: Notifying a trader about mitigation

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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.

If you decide mitigation is appropriate you should write to the trader stating

  • the full amount of the penalty due
  • the amount it has been reduced by
  • all the circumstances which have been considered in reaching the decision.

Note: This is important in case the trader appeals to a VAT and Duties Tribunal.

The trader must be told of his rights of appeal to the tribunal.