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 ‘knew or should have known’ 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.