Finance Act 1993

3 (1) After section 15 of the 1985 Act there shall be inserted the following section—

“15A Mitigation of penalties under sections 13, 14, 14A and 15.

(1) Where a person is liable to a penalty under any of sections 13, 14, 14A and 15 above, the Commissioners or, on appeal, a value added tax tribunal may reduce the penalty to such amount (including nil) as they think proper.

(2) In the case of a penalty reduced by the Commissioners under subsection (1) above, a value added tax tribunal, on an appeal relating to the penalty, may cancel the whole or any part of the reduction made by the Commissioners.

(3) None of the matters specified in subsection (4) below shall be matters which the Commissioners or any value added tax tribunal shall be entitled to take into account in exercising their powers under this section.

(4) Those matters are—

(a) the insufficiency of the funds available to any person for paying any tax due or for paying the amount of the penalty;

(b) the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of tax;

(c) the fact that the person liable to the penalty or a person acting on his behalf has acted in good faith.”

(2) Subsection (4) of section 13 of the 1985 Act (mitigation of penalty under section 13) shall cease to have effect; and—

(a) in subsection (1) of that section, for “subsections (4) and (7)” there shall be substituted “subsection (7)”;

(b) in paragraph (b) of subsection (5) of that section, for the words from “have power” to the end of that paragraph there shall be substituted “have power under section 15A below to reduce a penalty under this section,”; and

(c) in section 40(1A) of the [1983 c. 55.] Value Added Tax Act 1983 (tribunal not to modify penalties under the 1985 Act), for “section 13(4)” there shall be substituted “section 15A”.

(3) This paragraph shall have effect in relation to any penalty under section 13, 14, 14A or 15 of the 1985 Act, other than one to which any person was assessed before the day on which this Act is passed.