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HMRC internal manual

VAT Assessments and Error Correction

General assessment procedures: When to use supplementary assessments

The making of supplementary assessments does not involve evidence of facts. An assessment under section 77(6) is based on the same facts as the original and is made only where the judgement applied to those facts remains unchanged.

For example: A supplementary assessment may be made where an arithmetical error is discovered in an officer’s calculation or schedule, perhaps a figure has been omitted or figures transposed, but the basis of the assessment remains the same, i.e. the original assessment is not fundamentally flawed.

If further information comes to light after the original assessment is made, a further assessment should be made as normal for the additional amount. This is a completely new assessment and is subject to its own time limits.

You must not make supplementary assessment to correct errors of judgement, for example: where the wrong period was assessed or where the assessment was made against the wrong legal entity.

In all cases where you find that the original assessment is fundamentally flawed, it must be withdrawn and a fresh assessment correctly made, subject to time limits.

Section 77(6) must not be used to assess an additional amount where, for example, the information considered in making the original assessment is revisited and it is found that a higher assessment would have resulted had a different method of calculation been applied. You must not change the basis of the original assessment in this way.

The use of supplementary assessments should be the exception rather than the rule. The accuracy of original assessments is still vital.

In the main it is advisable that should any arithmetical or clerical error discovered in the original be of such significance as to throw doubt on the judgement exercised, the original should be withdrawn and a fresh assessment made, in preference to making a supplementary assessment under section 77(6)

Note: Both are subject to the time limits applying to the original assessment.

Where a supplementary assessment is considered appropriate, a VAT641 for the additional amount being assessed should be completed, countersigned as appropriate and processed in the normal way.

If the trader has lodged an appeal against the original assessment, you should consult the Solicitor’s office before making and notifying a supplementary assessment.