Part IV Administration, collection and enforcement
Assessments of VAT and other payments due
C173 Failure to make returns etc.
1
Where a person has failed to make any returns required under this Act (or under any provision repealed by this Act) or to keep any documents and afford the facilities necessary to verify such returns or where it appears to the Commissioners that such returns are incomplete or incorrect, they may assess the amount of VAT due from him to the best of their judgment and notify it to him.
2
In any case where, for any prescribed accounting period, there has been paid or credited to any person—
a
as being a repayment or refund of VAT, or
b
as being due to him as a VAT credit,
an amount which ought not to have been so paid or credited, or which would not have been so paid or credited had the facts been known or been as they later turn out to be, the Commissioners may assess that amount as being VAT due from him for that period and notify it to him accordingly.
3
An amount—
a
which has been paid to any person as being due to him as a VAT credit, and
b
may be assessed under subsection (2) above notwithstanding that cancellation.
4
Where a person is assessed under subsections (1) and (2) above in respect of the same prescribed accounting period the assessments may be combined and notified to him as one assessment.
5
Where the person failing to make a return, or making a return which appears to the Commissioners to be incomplete or incorrect, was required to make the return as a personal representative, trustee in bankruptcy, F21trustee in sequestration, receiver, liquidator or person otherwise acting in a representative capacity in relation to another person, subsection (1) above shall apply as if the reference to VAT due from him included a reference to VAT due from that other person.
6
An assessment under subsection (1), (2) or (3) above of an amount of VAT due for any prescribed accounting period must be made within the time limits provided for in section 77 and shall not be made after the later of the following—
a
2 years after the end of the prescribed accounting period; or
b
one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge,
but (subject to that section) where further such evidence comes to the Commissioners’ knowledge after the making of an assessment under subsection (1), (2) or (3) above, another assessment may be made under that subsection, in addition to any earlier assessment.
F136A
In the case of an assessment under subsection (2), the prescribed accounting period referred to in subsection (6)(a) and in section 77(1)(a) is the prescribed accounting period in which the repayment or refund of VAT, or the VAT credit, was paid or credited.
7
Where a taxable person—
a
has in the course or furtherance of a business carried on by him, been supplied with any goodsF27... or otherwise obtained possession or control of any goods, or
b
has, in the course or furtherance of such a business, imported any goods F28...,
the Commissioners may require him from time to time to account for the goods; and if he fails to prove that the goods have been or are available to be supplied by him or have been exported or otherwise removed from the United Kingdom without being exported or so removed by way of supply or have been lost or destroyed, they may assess to the best of their judgment and notify to him the amount of VAT that would have been chargeable in respect of the supply of the goods if they had been supplied by him.
F27A
Where a fiscal warehousekeeper has failed to pay VAT required by the Commissioners under section 18E(2), the Commissioners may assess to the best of their judgment the amount of that VAT due from him and notify it to him.
7B
Where it appears to the Commissioners that goods have been removed from a warehouse or fiscal warehouse without payment of the VAT payable under section 18(4) or section 18D on that removal, they may assess to the best of their judgment the amount of VAT due from the person removing the goods or other person liable and notify it to him.
8
In any case where—
a
as a result of a person’s failure to make a return for a prescribed accounting period, the Commissioners have made an assessment under subsection (1) above for that period,
b
the VAT assessed has been paid but no proper return has been made for the period to which the assessment related, and
c
as a result of a failure to make a return for a later prescribed accounting period, being a failure by a person referred to in paragraph (a) above or a person acting in a representative capacity in relation to him, as mentioned in subsection (5) above, the Commissioners find it necessary to make another assessment under subsection (1) above,
then, if the Commissioners think fit, having regard to the failure referred to in paragraph (a) above, they may specify in the assessment referred to in paragraph (c) above an amount of VAT greater than that which they would otherwise have considered to be appropriate.
9
Where an amount has been assessed and notified to any person under subsection (1), (2), (3) F3, (7), (7A) or (7B) above it shall, subject to the provisions of this Act as to appeals, be deemed to be an amount of VAT due from him and may be recovered accordingly, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.
10
For the purposes of this section notification to a personal representative, trustee in bankruptcy, F22trustee in sequestration, receiver, liquidator or person otherwise acting as aforesaid shall be treated as notification to the person in relation to whom he so acts.
F5274 Interest on VAT recovered or recoverable by assessment.
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F2975 Assessments in cases of acquisitions of certain goods by non-taxable persons.
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C776 Assessment of amounts due by way of F71penalty, interest or surchargeF71penalty F72... .
C31
Where any person is liable—
b
to a penalty under any of sections 60 F24to 69C, or
F59c
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F9d
a penalty under regulations made under section 135 of the Finance Act 2002 (mandatory electronic filing of returns) in connection with VAT,
the Commissioners may, subject to subsection (2) below, assess the amount due by way of F53penalty, interest or surchargeF53penalty F62..., as the case may be, and notify it to him accordingly; and the fact that any conduct giving rise to a penalty under any of sections 60 F4to F869BF10or the regulations may have ceased before an assessment is made under this section shall not affect the power of the Commissioners to make such an assessment.
C32
Where a person is liable to a penalty under section 69 for any failure to comply with such a requirement as is referred to in subsection (1)(c) to (f) of that section, no assessment shall be made under this section of the amount due from him by way of such penalty unless, within the period of 2 years preceding the assessment, the Commissioners have issued him with a written warning of the consequences of a continuing failure to comply with that requirement.
C33
In the case of the F54penalties, interest and surchargeF54penalties F65... referred to in the following paragraphs, the assessment under this section shall be of an amount due in respect of the prescribed accounting period which in the paragraph concerned is referred to as “the relevant period”—
a
b
in the case of a penalty under section 60 relating to the evasion of VAT, the relevant period is the prescribed accounting period for which the VAT evaded was due;
c
in the case of a penalty under section 60 relating to the obtaining of the payment of a VAT credit, the relevant period is the prescribed accounting period in respect of which the payment was obtained;
d
in the case of a penalty under section 63, the relevant period is the prescribed accounting period for which liability to VAT was understated or, as the case may be, for which entitlement to a VAT credit was overstated; F12...
F60e
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F11f
in the case of a penalty under regulations made under section 135 of the Finance Act 2002, the relevant period is the prescribed accounting period in respect of which the contravention of, or failure to comply with, the regulations occurred.
F313A
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C34
In any case where the amount of any F58penalty, interest or surchargeF58penalty F67... falls to be calculated by reference to VAT which was not paid at the time it should have been and that VAT (or the supply which gives rise to it) cannot be readily attributed to any one or more prescribed accounting periods, it shall be treated for the purposes of this Act as VAT due for such period or periods as the Commissioners may determine to the best of their judgment and notify to the person liable for the VAT and F58penalty, interest or surchargeF58penalty F67....
C35
Where a person is assessed under this section to an amount due by way of any F56penalty, interest or surchargeF56penalty F66... falling within subsection (3) F32... above and is also assessed under section 73(1), (2) F6,(7), (7A) or (7B) for the prescribed accounting period which is the relevant period under subsection (3) F32... above, the assessments may be combined and notified to him as one assessment, but the amount of the F56penalty, interest or surchargeF56penalty F66... shall be separately identified in the notice.
F336
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C37
In the case of an amount due by way of penalty under section 66 or 69 F68...—
a
a notice of assessment under this section shall specify a date, being not later than the date of the notice, to which the aggregate amount of the penalty which is assessed F69... is calculated; and
b
if the penalty F70... continues to accrue after that date, a further assessment or assessments may be made under this section in respect of amounts which so accrue.
C38
If, within such period as may be notified by the Commissioners to the person liable to a penalty under section 66 or 69 F63...—
a
a failure or default falling within section 66(1) or 69(1) is remedied, F61...
F61b
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it shall be treated for the purposes of section 66 or 69 F64... as paid or remedied on the date specified as mentioned in subsection (7)(a) above.
C6C49
If an amount is assessed and notified to any person under this section, then unless, or except to the extent that, the assessment is withdrawn or reduced, that amount shall be recoverable as if it were VAT due from him.
C2C510
For the purposes of this section, notification to a personal representative, trustee in bankruptcy, F23trustee in sequestration, receiver, liquidator or person otherwise acting in a representative capacity in relation to the person who made the acquisition in question shall be treated as notification to the person in relation to whom he so acts.
F3476ASection 76: cases involving special accounting schemes
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77 Assessments: time limits and supplementary assessments.
1
Subject to the following provisions of this section, an assessment under section 73F35... or 76, shall not be made—
a
b
in the case of an assessment under section 76 of an amount due by way of a penalty which is not among those referred to in subsection (3) of that section, F164 years after the event giving rise to the penalty.
F72
Subject to subsection (5) below, an assessment under section 76 of an amount due by way of any F46penalty, interest or surchargeF46penalty F49... referred to in subsection (3) F37... of that section may be made at any time before the expiry of the period of 2 years beginning with the time when the amount of VAT due for the prescribed accounting period concerned has been finally determined.
2A
Subject to subsection (5) below, an assessment under section 76 of a penalty under section 65 or 66 may be made at any time before the expiry of the period of 2 years beginning with the time when facts sufficient in the opinion of the Commissioners to indicate, as the case may be—
a
that the statement in question contained a material inaccuracy, or
b
that there had been a default within the meaning of section 66(1),
came to the Commissioners’ knowledge.
3
In relation to an assessment under section 76, any reference in subsection (1) or (2) above to the prescribed accounting period concerned is a reference to that period which, in the case of the F47penalty, interest or surchargeF47penalty F50... concerned, is the relevant period referred to in subsection (3) F38... of that section.
C8F144
In any case falling within subsection (4A), an assessment of a person (“P”), or of an amount payable by P, may be made at any time not more than 20 years after the end of the prescribed accounting period or the importationF39... or event giving rise to the penalty, as appropriate (subject to subsection (5)).
C84A
Those cases are—
a
a case involving a loss of VAT brought about deliberately by P (or by another person acting on P's behalf),
b
a case in which P has participated in a transaction knowing that it was part of arrangements of any kind (whether or not legally enforceable) intended to bring about a loss of VAT,
c
a case involving a loss of VAT attributable to a failure by P to comply with a notification obligation, and
d
a case involving a loss of VAT attributable to a scheme in respect of which P has failed to comply with an obligation under paragraph 6 of Schedule 11A F25or an obligation under paragraph 17(2) or 18(2) of Schedule 17 to FA 2017.
C84B
In subsection (4A) the references to a loss of tax brought about deliberately by P or another person include a loss that arises as a result of a deliberate inaccuracy in a document given to Her Majesty's Revenue and Customs by that person.
4C
In subsection (4A)(c) “notification obligation” means an obligation under—
a
paragraph 5, 6, 7 or 14(2) or (3) of Schedule 1,
F41b
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F42c
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d
paragraph 3, 4 or 7(2) or (3) of Schedule 3A, F43...
F43e
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5
Where, after a person’s death, the Commissioners propose to assess a sum as due by reason of some conduct (howsoever described) of the deceased, including a sum due by way of F45penalty, interest or surchargeF45penalty F48...—
F18b
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6
If, otherwise than in circumstances falling within section 73(6)(b) F44..., it appears to the Commissioners that the amount which ought to have been assessed in an assessment under that section or under section 76 exceeds the amount which was so assessed, then—
a
under the like provision as that assessment was made, and
b
on or before the last day on which that assessment could have been made,
the Commissioners may make a supplementary assessment of the amount of the excess and shall notify the person concerned accordingly.
C977ZAF51Late payment interest on amounts of VAT due
Interest charged under section 101 of the Finance Act 2009 on an amount of VAT (or an amount enforceable as if it were VAT) may be enforced as if it were an amount of VAT due from the person liable for the amount on which the interest is charged.