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HMRC internal manual

VAT Assessments and Error Correction

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HM Revenue & Customs
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Recovery Assessments: Time limits for Section 73(2) assessments

Section 120 of the Finance Act 2008 has amended the assessment time limits as they relate to assessments made under section 73(2) of the VAT Act 1994 by the insertion of a new subsection (6A) into section 73. VAEC2940 explains when a section 73(2) assessment is appropriate.

The effect of the amendment is that where you discover that a late claim for input tax (as defined in VAEC8120) or a VAT credit (as defined in VAEC4050) has been paid or credited where it ought not to have been, you can assess to recover it within:

  • two years after the end of the prescribed accounting period in which the claim was wrongly paid or credited; or
  • one year after the evidence of facts sufficient to justify the making of the assessment came to our knowledge and four years from the end of the prescribed accounting period in which the mistaken payment or crediting was made.