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HMRC internal manual

VAT Civil Penalties

Unauthorised issue penalty: Calculation and notification of a penalty: Determining tax as a Debt To The Crown

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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

VAT Act 1994 Schedule 11 paragraph 5 gives the power to recover as a Debt to the Crown an amount charged on an invoice as VAT whether or not VAT was chargeable. You must issue one letter to notify the unauthorised person of

  • a liability to a penalty
  • a demand for payment of that penalty
  • the allowance of any relief (for tax incurred), and
  • a demand for payment of the amount charged as tax on the invoice.

Recovery of a debt due to the Crown is made under Schedule 11 paragraph 5(2) of the VAT Act 1994.