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HMRC internal manual

VAT Assessments and Error Correction

General assessment procedures: When to issue a pre-assessment letter

The procedural guidance in this manual only covers the VAT Mainframe and VISION processes. For guidance on the Making Tax Digital and ETMP processes for fully migrated customers, see VAEC0200 and the Making Tax Digital for VAT compliance toolkit.

You should normally issue a pre-assessment letter if

  • the basis of the assessment is complex and / or contentious
  • records are scant and you are having difficulty arriving at the quantum, or
  • a tribunal appeal is likely and the business has expressed its intention to dispute the basis of your assessment.

Pre-assessment letters are not required for all assessments. For example where;

  • the intended assessment is about to run out of time
  • it is straightforward
  • the letter will be positively unhelpful in delaying matters, or
  • the letter is unnecessary.

Be mindful of assessment time limits

If you intend to issue a pre-assessment letter, you should always ensure that there is enough time for the business to respond to the letter and for you to make and notify the assessment before time limits run out.

If there is not enough time, then avoid using the letter and make the assessment to best judgement, on the evidence already to hand, see VAEC1400.

In this event, the Notices of Assessment should be accompanied by a clear explanation and / or schedule of calculations.

As the letter gives the trader a chance to respond to an intended assessment, you should only issue it before, not after, you have made the assessment. The letter signifies that you have not taken the final decision to assess, in that you have not yet made the assessments.

It is not expected that any response by a business to the letter requires you to issue a second pre-assessment letter with revised calculations.

Note: The pre-assessment letter never constitutes a made and notified assessment. If the deadline for a reply to the pre-assessment letter has expired, and you still intend to make an assessment, you should make and notify your assessment in the usual way without delay.