Finance Act 1985

15 Failures to notify and unauthorised issue of invoices.U.K.

(1)In any case where—

(a)a person fails to comply with any of paragraphs 3, 4 and 11(2) [F1and (3)] of Schedule 1 to the principal Act (duty to notify liability for registration or change in nature of supplies etc. by a person exempted from registration), or

(b)an unauthorised person issues [F2one or more invoices] showing an amount as being tax or as including an amount attributable to tax.

he shall be liable, subject to subsections (4) and (5) below, to a penalty equal to [F3the specified percentage] of the relevant tax or, if it is greater or the circumstances are such that there is no relevant tax, to a penalty of £50.

(2)In subsection (1)(b) above, “an unauthorised person” means anyone other than—

(a)a person registered under the principal Act; or

(b)a body corporate treated for the purposes of section 29 of that Act as a member of a group; or

(c)a person treated as a taxable person under regulations made under section 31(4) of that Act; or

(d)a person authorised to issue an invoice under regulations made under paragraph 2(6) of Schedule 7 to that Act; or

(e)a person acting on behalf of the Crown.

(3)In subsection (1) above “relevant tax” means,—

(a)in relation to a person’s failure to comply with paragraph 3 or paragraph 4 of Schedule 1 to the principal Act, the tax (if any) for which he is liable for the period beginning on the date with effect from which he is, in accordance with that paragraph, required to be registered and ending on that date on which the Commissioners received notification of, or otherwise [F4became fully aware of], his liability to be registered; and

(b)in relation to a person’s failure to comply with subparagraph (2) [F5or (3)] of paragraph 11 of Schedule 1 to the principal Act, the tax (if any) for which, but for any exemption from registration, he would be liable for the period beginning on the date of the change or alteration referred to in that subparagraph and ending on the date on which the Commissioners received notification of, or otherwise [F6became fully aware of], that change or alteration; and

(c)in relation to the issue of [F7one or more such invoices as are] referred to in subsection (1)(b) above, [F8the amount which is, or the aggregate of the amounts which are—

(i)shown on the invoice or invoices as tax, or

(ii)to be taken as representing tax].

[F9(3A)For the purposes of subsection (1) above the specified percentage is—

(a)10 per cent. where the relevant tax is given by paragraph (a) or (b) of subsection (3) above and the period referred to in that paragraph does not exceed nine months;

(b)20 per cent. where that tax is so given and the period soreferred to exceeds nine months but does not exceed eighteen months; and

(c)30 per cent. in any other case.]

(4)Conduct falling within subsection (1) above shall not give rise to liability to a penalty under this section if the person concerned satisfies the Commissioners or, on appeal, a value added tax tribunal that there is a reasonable excuse for his conduct.

(5)Where, by reason of conduct falling within subsection (1) above,—

(a)a person is convicted of an offence (whether under the principal Act or otherwise), or

(b)a person is assessed to a penalty under section 13 above,

that conduct shall not also give rise to liability to a penalty under this section.

(6)If it appears to the Treasury that there has been a change in the value of money since the passing of this Act or, as the case may be, the last occasion when the power conferred by this subsection was exercised, they may by order made by statutory instrument substitute for the sum for the time being specified in subsection (1) above such other sum as appears to them to be justified by the change.

(7)An order under subsection (6) above shall not apply in relation to a failure to comply which ended on or before the date on which the order comes into force.

(8)A statutory instrument under subsection (6) above shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Textual Amendments

F8Words and s. 15(3)(c)(i)(ii) substituted by Finance Act 1988 (c. 39, SIF 40:2), s. 18(2)(c)