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HMRC internal manual

VAT Assessments and Error Correction

Powers of assessment: VAT assessment powers: An overview of time limits

Time limits provide certainty for taxpayers and ensure that HMRC will not issue a demand for under-declared or over claimed tax once a prescribed interval has elapsed.

The VAT Act 1994 prescribes time limits only for the making of an assessment. It does not prescribe time limits for the notification of an assessment.

It is policy that notification should be done quickly, but delays in notification can occur due to localised and administrative difficulties.

Problems arise when an assessment is made close to the time limit for assessing. An officer may make an assessment in time but it may not be notified until later. HMRC have faced a number of challenges in this area in the past.

Therefore, HMRC as a matter of published policy, rely on the date of notification of an assessment as the material date for time limit purposes.

It is therefore essential that assessments are notified within the statutory time limits prescribed in the VAT Act for the making of assessments.

For further information on VAT assessment procedures, see VAEC8500.