VATF45140 - Basic interventions: matters to consider when determining whether to use a civil intervention: assessments and penalties: raising penalties in particular circumstances: penalty for transactions connected with VAT fraud
Overview
Section 69C of the VAT Act provides a penalty for traders who carry out transactions connected with VAT fraud. The penalty depends on the 鈥榢new or should have known鈥� test used in the Kittel and Mecsek cases, and it can be charged following a denial decision by HMRC which applies the principle used in those cases.
The penalty applies to transactions entered into on or after 16 November 2017.
The maximum rate is 30% of the VAT at stake in the denial.
The penalty needs to be assessed by HMRC, and it is appealable by the trader.
In some circumstances, a penalty charged on a company may be attributed to the responsible company officers, who become jointly liable, with the company, to pay it.
Some penalty details may be eligible for publication.