Best judgement

By Tolley

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

  • Best judgement
  • What is best judgement?
  • Tribunal approach to appeals against best judgement
  • HMRC considerations
  • Invalid assessments
  • Prime assessments
  • Taxpayer appeals against best judgement

This guidance note provides an overview of the principles that need to be applied by HMRC when they issue assessments to VAT registered businesses. HMRC are expected to use their 'best judgement' when making a decision to raise an assessment. Please see the Assessments guidance note for more information on assessments.

VAEC1400; VATA 1994, s 73; De Voil Indirect Tax Service V5.132C (subscription sensitive)
What is 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.

Van Boeckel v C&E QB [1981] STC 290 (subscription sensitive); VAEC1420


  • is not required to do the work of the taxpayer
  • must perform its duties honestly and above board
  • must fairly consider all material put before it and based on that material make a decision that is reasonable and not arbitrary
  • must be in possession of some material upon which it can base their judgement

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

CA McCourtie LON/92/191 (VTD 12239) (subscription sensitive); VAEC1420
  • the facts must be objectively gathered and intelligently interpreted by HMRC
  • any calculations undertaken must be arithmetically sound
  • any sampling techniques must be representative

HMRC is expected to consider the following when issuing an assessment:

  • HMRC must be in possession of documents / material that has

More on Best judgment and unjust enrichment: