We reported in the Autumn Statement 2016 that the government would legislate in Finance Bill 2017 to introduce a penalty for participation in VAT fraud. The new penalty will be a fixed rate of 30% of the VAT due.
Some changes have been made to the draft legislation, including limiting the naming of a company officer to instances where the amount of tax due exceeds £25,000.
The new penalty will take effect once the Finance Bill receives Royal Assent.
The new penalty will be applied to businesses and company officers who knew or should have known that their transactions were connected with VAT fraud.