Where a person
- submits a claim, whether under section 80 of the VAT Act 1994 or under section 25 of the VAT Act and regulation 29 of the VAT Regulations 1995; and
- the claim overstates the amount due to them from HMRC; and
- it relates to a prescribed accounting period in respect of which the return was due on or after 1 April 2009, and
- the inaccuracy in the claim is a result of either careless or deliberate behaviour
they may be liable to a penalty under paragraph 1 of Schedule 24 to the Finance Act 2007.
They will not however be liable to a penalty if they took reasonable care with their calculations and the error arose despite of this.
Sch 24 penalties may be raised where, for example, a person
- makes a claim which they then withdraw after HMRC has started verifying the claim; or
- makes a claim which is clearly for accounting periods which are out of time.
See CH80000 for guidance on the application and assessment of penalties.