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HMRC internal manual

VAT Assessments and Error Correction

HM Revenue & Customs
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Powers of assessment: VAT assessment powers: The one year evidence of facts rule

Section 73(6)(b) VATA94 allows HMRC to make an assessment up to one year after the last piece of material evidence (evidence of facts, see VAEC1300) comes to their attention.

To decide when the one year evidence of facts rule starts you will need to establish when HMRC received the last piece of relevant information to make the assessment. This is when the information received in the opinion of the assessing officer provides sufficient facts to justify the raising of the assessment.

Sufficient facts means having the necessary information to ensure the assessment is made by you to best judgement, see VAEC1400.

In cases where there is more than one officer involved in an enquiry, such as MTIC cases involving multi-party information exchanges, robust management controls should be put in place to ensure all information which is essential to making the assessment is reported promptly to you, as the person responsible for making the assessments. This should ensure that you receive relevant information in time for you to comply with the one year evidence of facts rule.

The one year rule, which establishes the time by which the assessment must be made, applies in conjunction wit the four and twenty year rules which establish how far back you can assess.

If you are outside of the one year evidence of facts rule, the two year rule can be particularly useful. It means an assessment can still cover periods up to 2 years old even if you are out of time under the one year rule, see VAEC1141.