Commentary

V5.132B Conduct giving rise to a VAT assessment—other

Part V5 Compliance, enforcement and appeals

V5.132B Conduct giving rise to a VAT assessment—other

V5.132B Conduct giving rise to a VAT assessment—other

Failure to keep documents and afford facilities (VATA 1994, s 73(1))

HMRC may assess the amount of tax due from a person who has failed to keep any documents and afford the facilities necessary to verify any returns made by him1. It is suggested that the word 'and' should be read disjunctively2 so that a person who fails to afford facilities for verification may be assessed whether or not he has failed to keep the relevant documents. The amount of tax due must be assessed to HMRC's best judgement3.

The 'amount of tax due' does not include an amount recoverable under VATA 1994, Sch 11, para 5(2), (3) (invoice showing amount as VAT) which is not itself VAT4.

A failure to afford facilities may arise, for example, in relation to HMRC's powers to inspect premises, goods and computers; to take samples; or to require a gaming machine to be opened5.

Documents play an important role in relation to input tax credit6, the second-hand goods schemes7 and zero-rating8. Failure to keep the required documents may result in these reliefs being withdrawn in relation to particular purchases, sales or importations.

Excess VAT refund/repayment/credit (VATA 1994, s 73(2))

A taxable person is entitled to credit for so much of his input tax as is allowable and, at the end of each prescribed accounting period, he is entitled to deduct that amount from any output tax which is due from him9. If no output tax is due at the end of the

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