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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Unauthorised issue penalty: Calculation and notification of a penalty: Reason for not imposing 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Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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.

The issue by an unauthorised person of an invoice either charging VAT or under the Flat Rate Formers scheme will result in a liability to the imposition of a civil penalty under section 67(1)(c) of the VAT Act 1994 unless

  • The invoice was issued before 12 July 1992 in the case of a Flat Rate Farmers scheme invoice or 25 July 1985 for all other invoices
  • The unauthorised person, by reason of the issue of the invoice, is convicted of an offence (whether under the VAT Act 1994 or otherwise) or is subject to a penalty for conduct involving dishonesty for the purposes of evading tax under section 60 of the VAT Act 1994 (civil evasion penalty), see VCP10300.
  • The invoice was issued during a period in which the trader had failed to notify a liability to register and action is appropriate under section 67(1)(a) of the VAT Act 1994.
  • No penalty should be applied if a reasonable excuse exists, see VCP11252.