Produced by Tolley
  • 04 Apr 2022 11:48

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Best judgement
  • What is best judgement?
  • What factors will HMRC consider when using best judgement?
  • Lack of information
  • Calculating arrears
  • Centrally issued / prime assessment
  • How does a tribunal approach to appeals against best judgement?
  • What should taxpayer’s consider when appealing against ‘best judgement’
  • Practical points

Best judgement

HMRC is expected to use its 'best judgement' when making a decision to raise an assessment and this guidance note provides an overview of the principals that need to be followed. Please see the Assessments guidance note for more information on assessments.

For more in depth commentary, see De Voil Indirect Tax Service V5.132C.

What is best judgement?

HMRC is required to use raise assessments for VAT using its ‘best judgement’. However, the burden falls on the business to prove that HMRC has not issued an assessment using its best judgement.

The principles regarding what constitutes best judgement are taken from a High Court decision in Van Boeckel where the following benchmark was established.


  1. is not required to do the work of the taxpayer

  2. must perform its duties honestly and above board

  3. must fairly consider all material put before it and based on that material make a decision that is reasonable and not arbitrary

  4. must be in possession of some material upon which it can base its best judgement

Van Boeckel v C&E QB [1981] STC 290; VAEC1420

These initial principles have been further clarified in subsequent decisions and in the case CA McCourtie, the tribunal laid down three further considerations:

  1. the facts must be objectively gathered and intelligently interpreted by HMRC

  2. any calculations undertaken must be arithmetically sound

  3. any sampling techniques must be representative

CA McCourtie LON/92/191 (VTD 12239); VAEC1420

HMRC is expected to consider the following when ensuring that the assessment is issued using best judgement:

  1. HMRC must be in possession

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