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HMRC internal manual

VAT Assessments and Error Correction

Recovery Assessments: Following a mistake of law

You may need to assess periods where returns have been submitted on the basis of a court ruling which has since been overturned in HMRC’s favour. These are ‘normal’ assessments made under Section 73(1) or 73(2) VATA 1994.

Assessment time limits cannot begin to run from the date of the court judgement or its delivery. There is however continuing uncertainty about

* which prescribed accounting period should be addressed when a recovery assessment is made under S73(2)

If your assessment follows resolution of a legal dispute about the VAT treatment of a supply, or entitlement to input tax, you should always pay regard to any specific guidance given by the appropriate liability team prior to assessing.

If you are in any doubt as to whether recovery action is appropriate, you should seek their advice in advance.