VCP10799 | Misdeclaration penalty: Discretion, reasonable excuse, and mitigation: Using discretion, is there any reason for us not to charge a penalty

Please note: VAT Misdeclaration Penalty has been replaced by the Schedule 24 inaccuracy penalty for all accounting periods where the return period commences on or after 01/04/2008 and the due date is on or after 01/04/2009. Misdeclaration penalty will still apply where the due date is before 01/04/2009.

Please see the Compliance Handbook CH80000 Penalties for Inaccuracies for further details.

HMRC has discretion whether or not to assess any penalty, interest or surcharge. Having quantified the liability to a penalty you then need to decide if the penalty should apply.

When making this decision you will need to make sure you maintain equality when applying civil penalties, consider all the circumstances of the particular case and don’t forget that that the fundamental objective of civil penalties is to encourage trader compliance.