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HMRC internal manual

Debt Management and Banking Manual

VAT: Introduction to VAT: General

Value Added Tax (VAT) is a tax on consumer expenditure and is charged on business transactions, imports and acquisitions. It is the UK’s main method of indirect taxation.

The Commissioners for Her Majesty’s Revenue and Customs are responsible for the collection and management of VAT (Section 5(1) (b) of the Commissioners for Revenue and Customs Act 2005).

Legislative authority to recovery VAT debt

VAT due from any person shall be recoverable as a debt due to the Crown (paragraph 5(1) of Schedule 11 to the VAT Act 1994).

Amounts assessed (including penalties and interest) are deemed to be amounts of VAT and may, therefore, be recovered as debts due to the Crown (DMBM530030).

Allocation of tax period

All customers are given a tax period (normally 3 calendar months long) when they apply for VAT registration. These tax periods follow on from one to the next with no gaps in between. In order to spread the flow of returns evenly over the year, tax periods are staggered.

Stagger groups

Customers are automatically allocated by the mainframe to a stagger group (this determines when the tax is to be paid) and are notified of their tax periods by the Certificate of Registration (VAT4).

Customers can request their own stagger periods by writing to the National Registration Service. Additionally, a customer may apply to be registered on a non-standard tax period (NSTP).

The stagger groups are as below:

Stagger Groups Stagger number
Monthly tax periods  
Quarter ending:  
March, June, September, December 1
April, July, October, January 2
May, August, November, February 3