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Introduction

Legislation¹ provides for a penalty regime in relation to import VAT. The regime makes provision for penalties in respect of the evasion of, and contravention of rules in relation to, a 'relevant tax or duty'. This term includes import VAT, ie VAT chargeable by virtue of VATA 1994, s 1(1)(c)²

The penalties are similar to those arising under the civil penalty regime for VAT, but are subject to a demand³ rather than assessment. The appeals procedure follows that for customs and excise duty appeals, so a review must be undertaken by HMRC before an appeal to a tribunal may be made.

Penalty for evasion of import VAT

Where⁴:

1. Ìý

   •ÌýÌýÌýÌý a person engages in any conduct for the purpose of evading import VAT, and

2. Ìý

   •ÌýÌýÌýÌý their conduct involves dishonesty (whether or not such as to give rise to any criminal liability)

they are liable to a penalty equal to the amount of import VAT evaded.

The term 'evading' includes obtaining