Value Added Tax Act 1994 section 35

Penalties for errors: disclosure

Section 35 explains how disclosures made to a foreign tax authority about errors in non-UK VAT returns are treated as disclosures to HMRC for penalty reduction purposes.

• When a person corrects a non-UK return by telling the relevant member state's tax authority about an inaccuracy, false information, or withheld information, this counts as a disclosure to HMRC.
• The disclosure is treated as equivalent to telling HMRC directly, for the purposes of the penalty rules in Schedule 24 to the Finance Act 2007.
• This ensures that taxpayers who voluntarily correct errors through the appropriate foreign tax authority are not disadvantaged when penalty reductions for disclosure are considered.
• The provision covers three types of error: inaccuracies in the return, the supply of false information, and the withholding of information.