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HMRC internal manual

VAT Civil Penalties

Mitigation Framework: Simple examples of mitigation: Mitigation examples

Late Registration

True Voluntary disclosure (late registration through own volition) accompanied by full quantification of arrears 50% mitigation
Other factors: evidence of efforts made to seek advice 10% mitigation
Total mitigation calculated 60% mitigation
Penalty calculated at 5% rate of £15k arrears. £750
Mitigation of 60% reduces penalty to £300

Late Registration

Late registration identified by the Department (SET activity) no mitigation
Full quantification of arrears by trader within say 30 days 25% mitigation
Compassionate grounds 20% mitigation
Total mitigation calculated 45%
Penalty calculated at 10% rate of £25k arrears £2500.
Mitigation of 45% reduces penalty to £1375


Error identified by Department no mitigation
partial co-operation and quantification of arrears 25% mitigation
Other factors such as computer or software errors 15% mitigation
Total mitigation calculated 40%
Penalty calculated at 15% of £20k arrears £3000
Mitigation of 40% reduces penalty to £1800