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HMRC internal manual

VAT Assessments and Error Correction

Section 73(1) and 73(2) assessments: Trader has used a scheme for which they are not eligible

You must advise the trader that they are not eligible to use the scheme they have chosen (giving the date that such ineligibility arose) and ask them to choose another scheme for which they are eligible

The trader will normally be expected to recalculate their output tax for the periods in which they were ineligible to use the chosen scheme. You should consider raising an assessment for any tax due, with penalties and interest if appropriate.