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HMRC internal manual

VAT Assessments and Error Correction

From
HM Revenue & Customs
Updated
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Circumstances that affect assessments: Insolvent traders

You must contact Debt Management (DM) for further guidance when making assessments to insolvent traders, particularly if the assessment spans the relevant date of the insolvency.

Action will be dependant on whether the case is under DM control at the time of making the assessment.

There are specific procedures to follow when making assessments to insolvent traders and you can find more detailed guidance in the Insolvency Manual.

The effect of insolvency on interest, penalties and surcharge are also explained in the Insolvency Manual.

The D1972 report

This print is generated by the setting of the insolvency indicators and lists assessments issued to traders which have been subsequently affected.

Check the LVO copy of the VAT655/7 (Notice of assessment / Error correction) to establish if they contain any periods after the date of insolvency, and if so, whether penalties and / or interest have been imposed on such periods.

  • If penalties and / or interest have been imposed for such periods you should refer to the Insolvency Team
  • If no penalties and / or interest have been imposed, no further action is required.