Value Added Tax Act 1994 section 60

VAT evasion: conduct involving dishonesty

Section 60 deals with penalties imposed on persons who evade VAT through dishonest conduct, including how the penalty is calculated and the circumstances in which it applies.

• Where a person is knowingly involved in or connected with the evasion of VAT through dishonest conduct, HMRC may impose a penalty equal to the amount of VAT evaded or sought to be evaded.
• The penalty applies whether the dishonest conduct relates to the person's own VAT liability or that of another person, covering situations such as understating output tax, overclaiming input tax, or obtaining fraudulent repayments.
• The conduct in question must involve dishonesty — this is assessed on the basis of what the person knew or believed, regardless of whether their belief was correct or reasonable.
• This section was subject to amendment by the Finance Act 2007, which introduced a revised penalty regime for inaccuracies in returns and documents under Schedule 24 to that Act.

---