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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit - Landfill Tax (LT): time limits for making assessments

The power to assess (for example, prime assessment) is sections 50 (1) and 50A of the Finance Act 1996 (as amended).

There are time limits for making assessments. The Errors & Assessments Policy Team has policy responsibility for time limits for assessments.

One year rule: registered persons

Section 50 (5)(b) of the Finance Act 1996. Assessments of a registered person made in the absence of a return or an acceptable return, officer assessments and assessments in cases of overpayments of tax, must be made within 1 year of the time when facts emerged to justify the making of the assessment.

Two year rule: Unregistered persons

Section 50 A(5) of Finance Act 1996 (as amended). Assessments of unregistered persons made when it appears that a person is liable to pay Landfill Tax on a taxable disposal and that person is not registered, officers assessments must be made within two years of evidence of facts that is sufficient to the Commissioners opinion to justify making of the assessment, comes to HMRC’s knowledge.

However, if further evidence comes to the knowledge of the Commissioners after the making of an assessment under this section then another assessment may be made against the unregistered person in addition to any earlier assessment.

Alternatively, there are also the following rules.

Two years rule: Registered persons

The assessment of a registered person, including assessments for penalties or interest, must be made within 2 years of the end of the prescribed accounting period or relevant period (s.50 (5)(a) and paragraph 33 (2) of Schedule 5 to the Finance Act 1996.

Four years rule: Registered and unregistered persons

This rule applies in all cases where the 1 year, 2 years, and 20 years rules do not apply. Under paragraph 33 (1) of Schedule 5 to the Finance Act 1996 (as amended), no assessment shall be made more than 4 years after the end of the relevant prescribed accounting period. And, under paragraph 33 (5)(a) of Schedule 5 to the Act , no assessment shall be made more than 4 years after the death of a debtor.

An assessment shall not be made under any provision of section 50A of Finance Act 1996 (as amended) evidence of facts, sufficient to the Commissioners’ opinion to justify the making of the assessment, coming to their knowledge more than four years after the end of the relevant prescribed accounting period.

Twenty years rule

Where a person has been convicted of fraud, or tax has been lost through evasion, or civil penalties have been issued for failure to register, the time limit for making assessments is extended up to 20 years after the end of the accounting period (paragraph 33 (4) of Schedule 5 to the Finance Act 1996).