§ Mr. Jacques Arnold
To ask the Chancellor of the Exchequer when serious misdeclaration penalty and default interest for value added tax will be introduced; and if he will make a statement.
§ Mr. Ryder
Customs and Excise has been publicising, and traders have been preparing for, the introduction of the final phase of the Keith civil penalty regime from 1 January 1990. In the light of the recent consultation exercise of the VAT (Accounting and Records) Regulations, and of the technical arrangements for introducing the new regime, I have been giving further careful consideration to the timing.
The regulations, incorporating important changes beneficial to business, have been laid before the House today and will come into force as planned on 1 January 1990. As part of the procedures, traders will have the opportunity to make separate voluntary disclosure of their larger errors to Customs, thereby avoiding penalty, rather than, as at present, including them on their VAT returns or adjusting their VAT accounts. In order that all traders may become familiar with the new regime, I have decided that serious misdeclaration penalty and default interest will not be introduced until 1 April 1990.