Commentary

V5.132A Conduct giving rise to a VAT assessment—returns

Part V5 Compliance, enforcement and appeals

V5.132A Conduct giving rise to a VAT assessment—returns

V5.132A Conduct giving rise to a VAT assessment—returns

Returns subject to a VAT assessment

The returns in respect of which an assessment may be made are1:

  1.  

    •     the return which a taxable person is required to make in respect of each prescribed accounting period, and

  2.  

    •     the return which a taxable person is required to make for the period ending on the date from which his registration was cancelled

The following claims are treated as returns for this purpose:

  1.  

    •     claim for refund of tax made by an EU trader2

  2.  

    •     claim for refund of tax made by a third country trader3, and

  3.  

    •     (with effect from 1 January 2015) returns in respect of UK VAT made under the Union and non-Union schemes for electronic services, telecommunications and broadcasting services (for which see V2.189E–V2.189X)4

Failure to make returns (VATA 1994, s 73(1))

HMRC may assess the amount of tax due from a person who has failed to make any return which he is required to make5. The amount of tax must be assessed to HMRC's best judgement6.

In practice, assessments are normally made under this provision without reference to the trader's accounting records for the prescribed accounting period concerned. As such, they are normally based upon centrally stored data concerning the trader's business and tax history and are commonly referred to as 'centrally issued assessments'7. The formula used, as described in the course of an early tribunal hearing, is as follows8:

Where—

x = total net tax for the period declared by

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