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HMRC internal manual

VAT Civil Penalties

HM Revenue & Customs
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New Means of Transport: Discretion, reasonable excuse and mitigation: Reasonable excuse

Please note: the Section 67 VATA 1994 penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 Finance Act 2008. The Failure to Notify penalty applies to obligations to notify the acquisition of a new means of transport on or after 01/04/2010. The penalty under Section 67 VATA 1994 continues to apply where the obligation to notify the acquisition of a new means of transport occurs before 01/04/2010.

Please see the Compliance Handbook CH70000 for more information about the Failure to Notify penalty.

No liability to a penalty exists if a person can satisfy us that there is a reasonable excuse for either

  • the failure to notify, or
  • the failure to pay.

If they can show that they have acted in what a reasonable person would consider a reasonable way, a penalty will not be imposed or will be withdrawn.

Section 71 of the Value Added Tax Act 1994 does not allow lack of funds or reliance upon a third party to be used as reasonable excuse.