The clause enables Customs to switch from a company to a director a VAT liability arising from a VAT evasion, if it appears to it that the liability arose from the director's dishonesty. The Institute of Direct Taxation says that, although clauses 33 to 36 gave the VAT tribunal the right of appeal, it is for the director to prove that Customs is wrong, not for Customs to prove otherwise. Customs must prove that there was evasion by the company, but not that the director was personally dishonest. The institute asks why, as this appears to be a criminal penalty under
human rights law, Customs should not also have to prove that the director has acted dishonestly.
As the hon. Gentleman has made clear, the clause provides for a civil evasion penalty to be levied against a director or other relevant officer of a body corporate liable for a penalty, when the conduct giving rise to the penalty is attributable to that individual's dishonesty. I should tell the hon. Gentleman and the Institute of Indirect Taxation that the proof rests with Customs, not with the director.
Allowing penalties to be assessed against dishonest directors or officers of a company ensures that those who benefit personally from an evasion for which they are directly responsible can be targeted. The provision mirrors arrangements that are already applied successfully in the VAT civil evasion penalty regime. On that basis, I commend the clause to the Committee.
Question put and agreed to.
Clause 28 ordered to stand part of the Bill.