Breach of Walking Possession Order: Why a penalty arises: The law supporting the penalty
The main sections of the VAT Act 1994 which apply are Section 68 and Section 77.
Section 68 of the VAT Act 1994 provides for a penalty for breach of a walking possession agreement in relation to distress where there has been unauthorised removal of property
Note: This does not apply to Scotland.
From 6 April 2014 Section 68 of the VAT Act 1994 applies only to taxpayers in Northern Ireland. Taxpayers in England and Wales will be subject to the Taking Control of Goods legislation which replaces Distraint in England and Wales. Taking Control of Goods is provided for by the Tribunals, Courts and Enforcement Act 2007.
Where a breach of a walking possession agreement occurs before 6 April 2014 taxpayers in England and Wales will remain liable to a penalty under section 68.
Please see the Debt Management and Banking web pages for further information about Taking Control of Goods.
VAT Act 1994 Section 68
- Subsection (2) defines a walking possession agreement.
- Subsection (3) provides for a penalty to be imposed if the agreement is breached and sets the rate of the penalty.
- Subsection (4) provides that a penalty shall not be imposed if there is a reasonable excuse.
VAT Act 1994 Section 77
This sets out the time limit allowed for assessment of a penalty
- (1) (b) in the case of an assessment under section 76 of an amount due by way of a penalty which is not among those referred to in subsection (3) of that section, 4 years after the event giving rise to the penalty.