§ Lord Glenarthur
asked Her Majesty's Government:
When they will introduce a "serious misdeclaration" penalty and default interest for value added tax.
The Paymaster General (The Earl of Caithness)
Customs and Excise have been publicising and traders have been preparing for the introduction of the final phase of the Keith civil penalty regime from 1st 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, we 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 1st 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 we have decided that serious misdeclaration penalty and default interest will not be introduced until 1st April 1990.