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HMRC internal manual

VAT Assessments and Error Correction

Prime assessments procedures: Amount due not readily reckonable

If the VAT account is considerably in arrears and the trader records individual output, determine the amount due by totalling the tax columns in the sales and purchases day books, or similar records.

If these records are also in arrears refer to sales and purchases invoices to determine the amounts not posted

If records of individual outputs are not maintained e.g. because the trader is operating a retail scheme, find out if possible the extent of gross takings in the period by reference to records such as till rolls, or cash receipts.

Where the trader is operating a retail scheme, calculate the tax inn accordance with the scheme.

If the accounts are seriously in arrears and as a result of the volume of transactions or the absence of basic records it is impossible to arrive at a tax assessment without undue expenditure of time, record on the visit report as much information as possible which will inform the making of a prime assessment.

The following information must be recorded

  • the estimated annual turnover in standard and zero-rated supplies respectively
  • the dates to which the sales and purchases accounts are posted and the respective totals to that date, and
  • when output tax is calculated by reference to gross takings and a retail scheme is used, such information about cash receipts as can be verified.

If it is possible to calculate a tax assessment, make and notify it using form VAT152A. Do not make an assessment using the VAT641 procedures.