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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: Concessionary relief for VAT incurred by a supplier who is neither registered nor required to be registered

Please note: the S 67 VATA 1994 penalty has been replaced by the VAT and Excise Wrongdoing penalty introduced by Schedule 41 Finance Act 2008.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 VAT incurred on purchases by the unauthorised person is not input tax as defined in Section 24(1) of the VAT Act 1994 and the trader has no entitlement to it.

However, concessionary relief may be applied.

Note: An allowance for relief on purchases can only be made in relation to the recovery demand. No allowance for relief on purchases can be made in relation to the penalty assessment.