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HMRC internal manual

VAT Assessments and Error Correction

Type of assessment: Prime assessments information: Considering evasion

You should be alert to the possibility of evasion where prime assessments below the true liability are persistently paid. You should also consult the guidance on issuing Schedule 24 penalties for under-assessments, which can be found at CH410000.

A trader gains a cash flow advantage by paying a low prime assessment, even if he subsequently renders a return and pays all the tax due.

If a trader pays a prime assessment which at the time he knows to be lower than his true liability his conduct may constitute evasion.

For evasion to have taken place it is not necessary to demonstrate that the trader intended to permanently deprive the Commissioners of the tax, i.e. that he did not intend to correct the position at a later date.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)