Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Assessments and Error Correction

Powers of assessment: VAT assessment powers: The four year rule

This rule means you will be in time to assess if the last day of the prescribed accounting period which contains the misdeclaration, or for which no return was rendered, is no older than four years on the day you make and notify your assessment.

The four year rule therefore works in a similar to the two year rule except that in order to be able to assess as far back as four years, your assessment must be made and notified within one year of evidence of fact.

Four years is the maximum time limit available to the Commissioners for assessments under Section 73 VATA except where the twenty year rule applies, see VAEC1140.

The clock for capping purposes does not stop running between, the time you have information sufficiently identifying an under-declaration, to the time when you have sufficient information to make the assessment.

It is therefore important to remember that the earliest accounting periods may be vulnerable to falling outside the assessing period, during the enquiry time and if in doubt you should consider making an assessment to best judgement, see VAEC1400.