VCP11746 - Mitigation Framework: Why and when we should mitigate a penalty: How the infringement occurred

How the infringement occurred

Compassionate grounds (where the circumstances are insufficient to warrant a reasonable excuse) such as

  • Unforeseen serious illness of the person responsible for completing the VAT returns (including third party such as professional advisor).
  • Death of a close relative of the person responsible for completing the VAT returns.

The penalty amount should be mitigated by 20% to 50%.

Other unforeseen and relevant events which nevertheless you do not consider provide a reasonable excuse on their own but are supported by evidence such as

  • Computer or software errors.
  • Flood, fire or other damage to premises.
  • Theft or break in.
  • Pressure of work i.e. exceptional and significant increase in workloads not in keeping with normal work fluctuations.
  • Staff problems i.e. where the person responsible for completing the VAT return leaves at short notice.
  • Clerical errors particularly in complex circumstances where management controls are in place but have failed to spot the error.

The penalty amount should be mitigated by 10% to 50%.

Complexity of liability in relation to the size of the business and frequency of transaction.

The penalty amount should be mitigated by 10% to 50%.