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HMRC internal manual

VAT Accounting Manual

Use of estimation for completing VAT returns: considering requests to estimate VAT returns: practical considerations

The following guidance describes the common features of estimation cases.

(a) Adequate information. You should not make a decision until you have all the information you need. It is unlikely that a visit will be necessary to confirm the need for estimation, but this will be a matter for local management depending on the complexity of the case.

(b) The level of approval. The level of approval or decision-making is a matter for local management, having regard to the complexity of the case and the experience of the officer. As a general rule, the decision should be delegated to the officer with the most detailed knowledge of the circumstances of the business. This is essential in order that a decision is made in both the light of the impact on the revenue and the impact on the business.

(c) Request in writing. Any business wishing to use estimated figures to complete its VAT return should apply in writing stating the reason for the request. Requests should be made in advance of the due date and will often have to be handled immediately if the business is to make the return by the due date. In the case of small and medium enterprises and those larger businesses not covered by Large Business Service (LBS) a written request should be forwarded to the Written Enquiries Team, Southend, who should liaise with local compliance colleagues familiar with the business in order to confirm the decision. Written enquiries from a business covered by LBS should be directed to the Client Relationship Manager responsible for the business.

(d) Requests received after due date. You may allow a request for estimation received after the due date if the circumstances justify it. But the business is to be informed at once that, in law, it has defaulted. If a request for estimation includes an excuse for the default, the excuse should be considered alongside the estimation request and in line with the guidance in VAT Civil Penalties Manual.

(e) Notifying decisions. You should notify the business of your decision in line with VATAC2800.