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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Assessing Time Limits: The Time Limits: When the new time limits take effect: VAT - extended time limits and transitional provisions

From 1 April 2009 you can make an assessment up to 20 years from the end of the prescribed accounting period or the date of the acquisition, importation or event giving rise to a penalty. You can only do this in limited circumstances. This can be summarised as being where tax has been lost

  • either because of their deliberate behaviour, see CH81150 or
  • irrespective of their behaviour, because,

    • the person failed to notify us about a relevant obligation, or
    • the person failed to comply with an obligation regarding a designated avoidance scheme, or
    • the person has taken part in a transaction knowing that it was part of arrangements that were intended to bring about a loss of tax, see CH56300.

For VAT assessments, under the one year rule in VAT94/S7396)(b), you have12 months from the time this evidence came to our knowledge in which to make an assessment going back up to 20 years.

Exception

If you rely upon the 20-year time limit to assess a prescribed accounting period ending on or before 31 March 2010 to recover tax lost because

  • the person failed to comply with a notification obligation, or
  • the person failed to comply with an obligation regarding a designated avoidance scheme

you can only do so if the failure gives rise to a penalty. The penalty will be under either VATA94/S67 or FA08/SCH41. There is no such requirement where you use the 20-year time limit to assess a prescribed accounting period ending on or after 1 April 2010.

This exception also applies where your assessment relates to an acquisition, importation or event giving rise to a penalty.

SI2009 No 403 Article 9