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HMRC internal manual

VAT Assessments and Error Correction

Types of assessment: Prime assessment information: How the system works

Traders who have failed to submit returns by the due date are identified during the monthly enforcement runs, normally carried out mid month.

Normally prime assessment for those traders are then calculated automatically by the main frame computer and notified directly to the trader on a Form VAT151 Notice of Assessment.

However, set parameters are built into the system to prevent the automatic issue of an assessment in certain circumstances, such as

  • where the computer calculation results in a figure above £100,000, or
  • where an inhibit signal has been set to prevent the automatic calculation of an assessment.

In such circumstances the case is referred to the local office for the manual notification of an assessment on Form VAT152 or VAT152a.

Prime assessments are made and issued only to payment traders. If a trader is categorised as a repayment trader and the repayment indicator consequently set, a missing return will not generate an assessment.

The onus is on the trader to render his return in order to claim any credit due to him. It is essential, therefore, that where the status of a business changes from repayment to payment the indicator is amended accordingly on the computer system.

Failure to do so will result in the business not receiving an automatic prime assessment in the event of a missing return.

Note: You should be alert to the possibility of evasion, see VAEC2250.