HMRC publish a range of factsheets that can be issued to taxpayers during a compliance check. There are various rules and powers which apply to HMRC compliance checks (formerly known as enquiries, visits and inspections) across almost all taxes administered by HMRC. These rules include the alignment of time limits for making tax assessments and claims. 

The Penalties for VAT, Excise and Landfill Tax wrongdoings CC/FS12 factsheet describes the penalties HMRC can charge for a VAT, Excise or Landfill Tax error known as a wrongdoing. 

The wrongdoing penalties apply in situations where taxpayers:

• Issue an invoice which includes ‘VAT’ that is not chargeable.
• Makes, knowingly causes, or knowingly permits a disposal of material at an unauthorised waste site from 1 April 2018.
• Handle goods on which excise duty has not been paid or deferred – for example bringing alcohol into the UK from abroad free of excise duty for personal consumption but with the intention of selling the alcohol in the UK.
• Use a product in a way that means more Excise Duty should have been paid – for example using red diesel in a road vehicle. 

A wrongdoing penalty can be for up to 100% of lost tax revenue. The actual penalty levied is based on a sliding scale and depends on whether the taxpayer's behaviour was non-deliberate, deliberate or deliberate and concealed. There are also further differences to the penalty if the disclosure was prompted or unprompted. 

Source: New feed