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HMRC internal manual

VAT Assessments and Error Correction

Power of assessment: Best judgement: Determine the overall credibility of your assessment

Once you have calculated the arrears to best judgement, you should ask yourself is this figure credible? Could the business have actually under-declared this amount of tax.

The tribunal will consider the above questions. If the amount you calculate does not pass the credibility test then your assessment may not be to best judgement. Ensure you have given enough consideration to all the facts and evidence.

If an assessment has not been made to best judgement, then it may be deemed to be invalid and cannot be maintained. In legal terms an invalid assessment is said to have never existed. See, however, VAEC1440 on partial breaches of best judgement.

There are times when you may be able to remedy an invalid assessment, see VAEC1520.