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HMRC internal manual

VAT Assessments and Error Correction

Power of assessment: Best judgement: Other methods used to calculate arrears

The following are examples of how officers have used other methods to calculate arrears.

Example 1

A till analysis was undertaken on both z readings and the grand total memory. The consecutive numbering of the z readings indicated that some were missing.

The officer used the difference between the grand till memory as shown between one z reading and the next to calculate the assessment.

The appellant challenged the use of till information alone to calculate an assessment and contended that some other method should have been used. The tribunal rejected the argument and upheld the assessment, case Majid & Partners LON/92/570 and LON/91/392.

Example 2

An assessment was raise on the basis of an Inland Revenue assessment. The officer was supplied with details of an IR investigation, together with the amounts and the terms of an offer made by the appellant to the IR.

The officer interviewed the trader in an attempt to agree the reasons for the settlement made with the IR. The trader failed to provide an explanation regarding the source of the money and an assessment and a civil evasion penalty were raised based on the Inland Revenue figures.

The tribunal upheld the assessment and the penalty, case Malcolm Groundwell t/a Angling and Hiking Centre - MAN/95/2554.