VAT assessments
Produced in partnership with Pinsent Masons
VAT assessments

The following Tax guidance note Produced in partnership with Pinsent Masons provides comprehensive and up to date legal information covering:

  • VAT assessments
  • When can HMRC make an assessment?
  • Procedure and notification
  • Amount of assessment
  • Changing the amount assessed
  • Time limits

VAT is a self-assessed tax in the sense that VAT registered persons must submit VAT returns and, at the same time, pay any VAT that they owe. In some situations, such as when a person fails to submit a return or submits an incorrect return, this system breaks down. HMRC has the power to collect tax in these circumstances by sending the person an assessment for the outstanding VAT.

Unless the assessment is appealed, withdrawn or reduced, VAT that has been assessed to a person is recoverable in the same way as any other amount of VAT due.

This Practice Note covers HMRC’s powers to make assessments, and the procedures and time limits it must comply with. For detail on how to appeal an assessment, see Practice Note: Appealing an HMRC decision.

When can HMRC make an assessment?

HMRC can make an assessment in a number of situations, including the following:

  1. a person fails to make a return

  2. a person makes an incomplete or incorrect return

  3. a person fails to keep documents or provide verification facilities (eg not allowing HMRC to inspect their premises)

  4. HMRC has wrongly made a repayment or credit (eg crediting input VAT which was not allowable)

  5. a person fails to account for goods (eg HMRC can assess VAT which would have been chargeable on a supply of goods