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HMRC internal manual

VAT Civil Penalties

Unauthorised issue penalty: Calculation and notification of a penalty: Notification of the 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Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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.

Form VAT 291 or VAT 641 cannot be used to impose penalties on unregistered persons.

The penalty assessment for such individuals will therefore be issued in the form of a letter which will include a demand for the amount charged as tax.

Any penalties issued to a registered trader must also follow the format given below to take account of the fact that the arrears being collected are a debt due to the Crown rather than tax arrears, see VCP11261.

Where relief on purchases

  • Has not been allowed use the letter No Relief on Purchase, see VCP11267.
  • Has been allowed use the letter Relief on Purchase Allowed, see VCP11268.

You will need 4 copies which should be allocated as follows

  • 2 copies - to be sent to the trader.
  • 1 copy - prominently marked in red ‘Civil Penalty Unauthorised Person’ to be sent to the Cumbernauld Tax Accounts Processing Centre.
  • 1 copy - to be retained in the LVO records.

A prepaid envelope addressed to the Cumbernauld Tax Accounts Processing Centre is to be included with the trader’s letter.

The assessing officer should contact the Cumbernauld Tax Accounts Processing Centre to obtain a penalty reference number, which should be included in the penalty assessment letter.