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HMRC internal manual

Compliance Handbook

Assessing Time Limits: VAT Limitations: Tax assessments

A VAT assessment, that is an assessment to tax, made more than 2 years after

  • the end of the prescribed accounting period, or
  • notification of the acquisition of goods into the UK

must be made within 12 months of the date that evidence of the facts that justify making the assessment comes to our knowledge.

However, this 12 months evidence of facts time limit is not separate and distinct from the other applicable time limits, see CH51300. You have 12 months from the discovery of the evidence giving rise to the assessment to make that assessment, subject to the other time limits. The evidence of facts rule is a limitation of the other applicable time limits.

For example

On an assurance visit on 31 August 2010 you discover that Antoinette has under-declared output tax on a number of invoices proper to the prescribed accounting period 10/06 (quarter ended 31 October 2006).

The prescribed accounting period is more than two years old and so the tax due cannot be assessed under the two year rule. Therefore the assessment must be made within 12 months of the date the evidence of facts that justify the assessment came to your knowledge, that is, by 31 August 2011. However, the assessment must be made in respect of prescribed accounting periods that fall within 4 years of the date that the assessment is made, see CH52100. You must therefore make the assessment by 31 October 2010.

The 12 months evidence of facts rule enables an assessment to be made up to 31 August 2011 but the assessment is also subject to the normal 4 year time limit. An assessment for the prescribed accounting period 10/06 must therefore be made by 31 October 2010.

Detailed guidance on the evidence of facts rule can be found in the VAT Assessment and Error Correction guidance (VAEC1300).

VATA94/S73(6) & S76(2)