PART I Customs and Excise and Value Added Tax
Chapter II Value Added Tax
14 Penalty for tax evasion: liability of directors etc.
1
Where it appears to the Commissioners—
a
that a body corporate is liable to a penalty under section 13 of the M1Finance Act 1985 (civil penalty for value added tax evasion where conduct involves dishonesty), and
b
that the conduct giving rise to that penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (in this section referred to as a “named officer”), the Commissioners may serve a notice under this section on the body corporate and on the named officer.
2
A notice under this section shall state—
a
the amount of the penalty referred to in subsection (1)(a) above (in this section referred to as “the basic penalty”); and
b
that the Commissioners propose, in accordance with this section, to recover from the named officer such portion (which may be the whole) of the basic penalty as is specified in the notice.
3
Where a notice is served under this section, the portion of the basic penalty specified in the notice shall be recoverable from the named officer as if he were personally liable under section 13 of the M2Finance Act 1985 to a penalty which corresponds to that portion; and the amount of that penalty may be assessed and notified to him accordingly under section 21 of that Act.
4
Where a notice is served under this section,—
a
the amount which, under section 21 of the Finance Act 1985, may be assessed as the amount due by way of penalty from the body corporate shall be only so much (if any) of the basic penalty as is not assessed on and notified to a named officer by virtue of subsection (3) above; and
b
the body corporate shall be treated as discharged from liability for so much of the basic penalty as is so assessed and notified.
5
No appeal shall lie against a notice under this section as such but—
a
where a body corporate is assessed as mentioned in subsection (4)(a) above, the body corporate may appeal against the Commissioners’ decision as to its liability to a penalty and against the amount of the basic penalty as if it were specified in the assessment; and
b
where an assessment is made on a named officer by virtue of subsection (3) above, the named officer may appeal against the Commissioners’ decision that the conduct of the body corporate referred to in subsection (1)(b) above is, in whole or part, attributable to his dishonesty and against their decision as to the portion of the penalty which the Commissioners propose to recover from him.
6
For the purposes of the M3Value Added Tax Act 1983, any appeal brought by virtue of subsection (5) above shall be treated as an appeal under section 40 of that Act; and the reference in subsection (1A) of that section to an amount assessed by way of penalty includes a reference to an amount assessed by virtue of subsection (3) or subsection (4)(a) above.
7
The provisions that may be included in rules under paragraph 9 of Schedule 8 to the M4Value Added Tax 1983 (procedure on appeals to value added tax tribunals) include provision with respect to the joinder of appeals brought by different persons where a notice is served under this section and the appeals relate to, or to different portions of, the basic penalty referred to in the notice.
8
In this section a “managing officer”, in relation to a body corporate, means any manager, secretary or other similar officer of the body corporate or any person purporting to act in any such capacity or as a director; and where the affairs of a body corporate are managed by its members, this section shall apply in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate.
9
This section does not apply where the conduct of the body corporate giving rise to the penalty took place before the passing of this Act.