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HMRC internal manual

VAT Civil Penalties

Mitigation Framework: Why and when we should mitigate a penalty: When we should mitigate

Consideration must also be given to any mitigating factors which warrant a reduction in the amount of penalty. Evidence of mitigating factors can arise both before and after a liability to a penalty arises.

The aim of a penalty is of course to encourage compliance, therefore where a normally compliant trader makes a one off error a previously good record should be recognised.

If when checking a trader’s history it is clear that the error is out of character with the usual attention paid to VAT matters, then the penalty may qualify for some mitigation.