On 1st September 2007 Public Notice 160 (PN 160) was introduced. This sets out the procedure for civil evasion penalty enquiries for indirect taxes outside of Code of Practice 9 (2005).
The new procedure will only be operated by appropriately trained staff in designated teams. It is designed to be used in lower value cases where there is evidence of dishonest conduct.
The key features of this procedure are that:-
- The taxpayer will be notified that they are suspected of conduct involving dishonesty
- HMRC will disclose the matters that are subject to enquiry, for example sales or purchases in a particular VAT return period but not the specific evidence that leads them to suspect dishonest conduct and
- The taxpayer will be invited to co-operate with HMRC’s enquiries and to tell them about any irregularities. It will be explained to them how co-operation and disclosure can earn reductions from a maximum penalty of 100%.
This procedure will only be used where HMRC has evidence that leads to a suspicion of dishonest conduct.
For expert advice call Kinsella Tax Investigations on 0800 471 4546