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HMRC internal manual

Compliance Handbook

Assessing Time Limits: Extended time limits: Arrangements intended to bring about a loss of VAT

The 20-year time limit for assessing tax applies where

  • tax has been under-declared or wrongly deducted because
  • a person has taken part in a transaction that they knew was part of an arrangement intended to bring about a loss of VAT.

For example

A trader may participate in a transaction knowing (or ought to have known on the facts of the case) that it is part of an MTIC (Missing Trader Intra-Community) scheme. If tax is lost because of that transaction and the person knew (or ought to have known) that it was part of arrangements intended to bring about that loss, we have 20 years to make an assessment to recover the tax.

All VAT tax assessments made more than 2 years after the end of the prescribed accounting period are subject to the 12 months evidence of facts rule, see CH51820.