VCP11111 - Breach of VAT Regulatory Provisions: Why a penalty arises: Penalties for a regulatory breach

In 1983 the independent Keith Committee on Enforcement Powers of Revenue Departments recognised poor trader compliance and considered that the then existing criminal sanctions were ineffective.

»Ê¹ÚÌåÓýapp review made recommendations which included a penalty system. »Ê¹ÚÌåÓýapp first phase of this system, which included penalties for breach of regulations, see VCP11130,was enacted in Section 17 of the Finance Act 1985.

»Ê¹ÚÌåÓýapp Keith Committee preferred the certainty and more general application of fixed rate, tax- geared penalties to the selectiveness of criminal proceedings as a means of securing compliance with the legal requirements of the tax.

It also recommended a tariff of daily rate penalties
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  • that were not mitigable and increasing in severity in relation to the frequency of similar offences, and
  • provision for periodic up rating in line with inflation.

»Ê¹ÚÌåÓýappre are no implications under the Human Rights Act for a breach of regulatory provisions penalty, see VCP10160.
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