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The penalties | |
25 Penalty for evasion | |
(1) In any case where— | |
(a) a person engages in any conduct for the purpose of evading any | |
relevant tax or duty, and | 5 |
(b) his conduct involves dishonesty (whether or not such as to give rise to | |
any criminal liability), | |
that person is liable to a penalty of an amount equal to the amount of the tax or | |
duty evaded or, as the case may be, sought to be evaded. | |
(2) Subsection (1) is subject to the following provisions of this Part. | 10 |
(3) Nothing in this section applies in relation to any customs duty of a preferential | |
tariff country. | |
(4) Any reference in this section to a person’s “evading” any relevant tax or duty | |
includes a reference to his obtaining or securing, without his being entitled to | |
it,— | 15 |
(a) any repayment, rebate or drawback of any relevant tax or duty, | |
(b) any relief or exemption from, or any allowance against, any relevant tax | |
or duty, or | |
(c) any deferral or other postponement of his liability to pay any relevant | |
tax or duty or of the discharge by payment of any such liability, | 20 |
and also includes a reference to his evading the cancellation of any entitlement | |
to, or the withdrawal of, any such repayment, rebate, drawback, relief, | |
exemption or allowance. | |
(5) In relation to any such evasion of any relevant tax or duty as is mentioned in | |
subsection (4), the reference in subsection (1) to the amount of the tax or duty | 25 |
evaded or sought to be evaded is a reference to the amount of— | |
(a) the repayment, rebate or drawback, | |
(b) the relief, exemption or allowance, or | |
(c) the payment which, or the liability to make which, is deferred or | |
otherwise postponed, | 30 |
as the case may be. | |
(6) Where, by reason of conduct falling within subsection (1) in the case of any | |
relevant tax or duty, a person— | |
(a) is convicted of an offence, | |
(b) is given, and has not had withdrawn, a demand notice in respect of a | 35 |
penalty to which he is liable under section 26, or | |
(c) is liable to a penalty imposed upon him under any other provision of | |
the law relating to that relevant tax or duty, | |
that conduct does not also give rise to liability to a penalty under this section | |
in respect of that relevant tax or duty. | 40 |
26 Penalty for contravention of relevant rule | |
(1) If, in the case of any relevant tax or duty, a person of a prescribed description | |
engages in any conduct by which he contravenes— | |
(a) a prescribed relevant rule, or | |
(b) a relevant rule of a prescribed description, | 45 |
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he is liable to a penalty under this section of a prescribed amount. | |
(2) Subsection (1) is subject to the following provisions of this Part. | |
(3) The power conferred by subsection (1) to prescribe a description of person | |
includes power to prescribe any person (without further qualification) as such | |
a description. | 5 |
(4) Different penalties may be prescribed under subsection (1) for different cases | |
or different circumstances. | |
(5) Any amount prescribed under subsection (1) as the amount of a penalty must | |
not be more than £2,500. | |
(6) The Treasury may by order amend subsection (5) by substituting a different | 10 |
amount for the amount for the time being specified in that subsection. | |
(7) A statutory instrument containing an order under subsection (6) may not be | |
made unless a draft of the instrument has been laid before, and approved by a | |
resolution of, the House of Commons. | |
(8) In this Part “relevant rule”, in relation to any relevant tax or duty, means any | 15 |
duty, obligation, requirement or condition imposed by or under any of the | |
following— | |
(a) the Customs and Excise Management Act 1979 (c. 2), as it applies in | |
relation to the relevant tax or duty; | |
(b) any other Act, or any statutory instrument, as it applies in relation to | 20 |
the relevant tax or duty; | |
(c) in the case of customs duty, Community export duty or Community | |
import duty, Community customs rules; | |
(d) in the case of import VAT, Community customs rules as they apply in | |
relation to import VAT; | 25 |
(e) any directly applicable Community legislation relating to the relevant | |
tax or duty; | |
(f) any relevant international rules applying in relation to the relevant tax | |
or duty. | |
(9) In subsection (8)— | 30 |
“Community customs rules” means customs rules, as defined in Article 1 | |
of the Community Customs Code; | |
“relevant international rules” means international agreements so far as | |
applying in relation to a relevant tax or duty and having effect as part | |
of the law of any part of the United Kingdom by virtue of— | 35 |
(a) any Act or statutory instrument, or | |
(b) any directly applicable Community legislation. | |
27 Exceptions from section 26 | |
(1) A person is not liable to a penalty under section 26 if he satisfies— | |
(a) the Commissioners, or | 40 |
(b) on appeal, an appeal tribunal, | |
that there is a reasonable excuse for his conduct. | |
(2) For the purposes of subsection (1) none of the following is a reasonable | |
excuse— | |
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(a) an insufficiency of funds available to any person for paying any | |
relevant tax or duty or any penalty due; | |
(b) that reliance was placed by any person on another to perform any task; | |
(c) that the contravention is attributable, in whole or in part, to the conduct | |
of a person on whom reliance to perform any task was so placed. | 5 |
(3) Where, by reason of conduct falling within subsection (1) of section 26 in the | |
case of any relevant tax or duty, a person— | |
(a) is prosecuted for an offence, | |
(b) is given, and has not had withdrawn, a demand notice in respect of a | |
penalty to which he is liable under section 25, or | 10 |
(c) is liable to a penalty imposed upon him under any other provision of | |
the law relating to that relevant tax or duty, | |
that conduct does not also give rise to liability to a penalty under section 26 in | |
respect of that relevant tax or duty. | |
(4) A person is not liable to a penalty under section 26 in respect of any conduct, | 15 |
so far as relating to import VAT, if in respect of that conduct— | |
(a) he is liable to a penalty under any of sections 62 to 69A of the Value | |
Added Tax Act 1994 (c. 23) (penalty for contravention of statutory | |
requirements as to VAT), or | |
(b) he would be so liable but for section 62(4), 63(11), 64(6), 67(9), 69(9) or | 20 |
69A(7) of that Act (conduct resulting in conviction, different penalty | |
etc). | |
28 Liability of directors etc where body corporate liable to penalty for evasion | |
(1) Where it appears to the Commissioners— | |
(a) that a body corporate is liable to a penalty under section 25, and | 25 |
(b) that the conduct giving rise to the 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 (a “relevant | |
officer”), | |
the Commissioners may give a notice under this section to the body corporate | 30 |
(or its representative) and to the relevant officer (or his representative). | |
(2) A notice under this section must state— | |
(a) the amount of the penalty referred to in subsection (1)(a) (the “basic | |
penalty”), and | |
(b) that the Commissioners propose, in accordance with this section, to | 35 |
recover from the relevant officer such portion (which may be the | |
whole) of the basic penalty as is specified in the notice. | |
(3) If a notice is given under this section, this Part shall apply in relation to the | |
relevant officer as if he were personally liable under section 25 to a penalty | |
which corresponds to that portion of the basic penalty specified in the notice. | 40 |
(4) If a notice is given under this section— | |
(a) the amount which may be recovered from the body corporate under | |
this Part is limited to so much (if any) of the basic penalty as is not | |
recoverable from the relevant officer by virtue of subsection (3), and | |
(b) the body corporate is to be treated as discharged from liability for so | 45 |
much of the basic penalty as is so recoverable from the relevant officer. | |
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(5) In this section “managing officer”, in relation to a body corporate, means— | |
(a) a manager, secretary or other similar officer of the body corporate, or | |
(b) a person purporting to act in any such capacity or as a director. | |
(6) Where the affairs of a body corporate are managed by its members, this section | |
applies in relation to the conduct of a member in connection with his functions | 5 |
of management as if he were a director of the body corporate. | |
Reduction of amount of penalty | |
29 Reduction of penalty under section 25 or 26 | |
(1) Where a person is liable to a penalty under section 25 or 26— | |
(a) the Commissioners (whether originally or on review) or, on appeal, an | 10 |
appeal tribunal may reduce the penalty to such amount (including nil) | |
as they think proper; and | |
(b) the Commissioners on a review, or an appeal tribunal on an appeal, | |
relating to a penalty reduced by the Commissioners under this | |
subsection may cancel the whole or any part of the reduction | 15 |
previously made by the Commissioners. | |
(2) In exercising their powers under subsection (1), neither the Commissioners nor | |
an appeal tribunal are entitled to take into account any of the matters specified | |
in subsection (3). | |
(3) Those matters are— | 20 |
(a) the insufficiency of the funds available to any person for paying any | |
relevant tax or duty or 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 any relevant tax or | |
duty, | 25 |
(c) the fact that the person liable to the penalty, or a person acting on his | |
behalf, has acted in good faith. | |
Demand notices | |
30 Demands for penalties | |
(1) Where a person is liable to a penalty under this Part, the Commissioners may | 30 |
give to that person or his representative a notice in writing (a “demand notice”) | |
demanding payment of the amount due by way of penalty. | |
(2) An amount demanded as due from a person or his representative in | |
accordance with subsection (1) is recoverable as if it were an amount due from | |
the person or, as the case may be, the representative as an amount of customs | 35 |
duty. | |
This subsection is subject to— | |
(a) any appeal under section 36 (appeals to tribunal); and | |
(b) subsection (3). | |
(3) An amount so demanded is not recoverable if or to the extent that— | 40 |
(a) the demand has subsequently been withdrawn; or | |
(b) the amount has been reduced under section 29. | |
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