VAT Act Section 69D – Company officer liability notices

To be the director of a business which receives a VAT penalty assessment is daunting enough but, when HMRC go on to seek to transfer the penalty to you personally, the issue takes on a whole different demeanour.  

The VAT Act 1994 includes the facility under section 69D to transfer a company penalty to individual officers where it is considered that there has been a tax loss, that loss is connected to fraud and the actions of the company which gave rise to the liability are attributable to the officer(s) of the company.  

Section 69D VAT Act 1994 ("VATA") letters are often issued by HMRC when a company has been charged a penalty under section 69C VATA usually following a decision to deny input tax credits based on the knowledge principle of “knew or should have known”.  This is commonly known as a “Kittel” decision.

There are strict technical compliance obligations which HMRC has to meet before a penalty can be transferred. Often, these compliance obligations are overlooked or mis-interpreted making the decision to transfer a penalty to an officer of the company invalid.   

If you have received a Personal Liability Notice under S69D or your company has been charged a penalty under S69C, get in touch with us on 0121 445 6178 or email us at enquire@aspirepartnership.co.uk with a copy of HMRC’s correspondence for a free and without obligation consultation.