Value Added Tax Act 1994 section 69C

Transactions connected with VAT fraud

Section 69C imposes a penalty on a person who enters into a transaction connected with another person's fraudulent evasion of VAT, where that person knew or should have known of the connection, and HMRC have issued a decision denying their VAT rights as a result.

• A penalty arises where a person enters into a transaction involving a supply that is connected with another person's VAT fraud, and the person knew or should have known about that connection, and HMRC have issued a denial decision removing a VAT right in relation to the supply.
• The penalty is 30% of the potential lost VAT, which is the additional VAT payable, the VAT not repaid, or the total of both, arising from HMRC's denial decision.
• HMRC must assess the penalty within two years of issuing the denial decision, and may issue the penalty notice in the same document as the denial decision itself.
• No penalty arises under this section if the person has already been penalised for an inaccuracy under the Finance Act 2007 or convicted of an offence in respect of the same actions.