VATF45180 - Basic interventions: matters to consider when determining whether to use a civil intervention: assessments and penalties: raising penalties in particular circumstances: calculating the penalty

The basic penalty before mitigation is 30% of the ‘potential lost VAT’.

Potential lost VAT is defined as:

• Any additional VAT which becomes payable as a result of HMRC’s denial decision plus
• Any VAT which is not repaid as a result of that decision