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HMRC internal manual

VAT Assessments and Error Correction

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HM Revenue & Customs
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How to assess and correct: Assessment procedures: VAT655 Notice of assessment and over-declarations

The Notice of Assessment Form VAT 655 is used to notify traders of under-declarations, over-declarations and additional assessments. It is automatically generated by the mainframe computer by input of form VAT 641 on to the VALID computer system. The VAT 655 consists of three parts

 
 
 
 

Notice of assessment

Contains

  • The trader’s name and address as retained on the database at the time the VAT 641 was input. This should be checked against the address inserted on the VAT 641 by the control officer. Any discrepancy should be resolved before the assessment is issued.
  • The officer’s name which appears as a reference for the trader and is derived from the VAT 641
  • The three digit code of trader’s Local Office
  • The trader’s VAT registration number, and
  • The eleven digit assessment reference number allocated by the VALID system

Summary of assessment

Contains

  • Tax summary; the net total of all over-declarations, under-declarations and additional assessments appears in the appropriate boxes
  • Interest summary; the total of all interest generated by the assessment appears in this box. There is no negative interest therefore the total interest amount will either be nil or a positive amount entered in the box headed “Due to Revenue and Customs”
  • Totals summary; sub totals of the amount of tax and interest due to and due from Customs and Excise and the total amount payable (or repayable) appear in the appropriate boxes

Assessment details by period

This part of the VAT 655 gives details of the tax assessment for each period covered by the assessment.

Interest is not period specific and is therefore only shown on the assessment summary.

The computer will print the details of the prescribed accounting period to which the assessment relates. Care should be taken when issuing assessments containing:

  • Dropped periods; the outputs for assessments on dropped periods only show a period reference. As our legal advisors have advised that period dates should also be included on the VAT 655, officers should insert this information manually.
  • Periods after the date of insolvency; the VAT 655 should be checked to establish if any periods have been assessed for interest after the insolvency date. If such a situation arises you should contact the Insolvency Team

The VAT 655 provides the assessment type and the reason code for each detail line completed on the VAT 641.

The notes which accompany the assessment explain the reason codes to the trader. If two or more detail lines are completed on the VAT 641 for the same period this will be reflected on the VAT 655 and separate boxes will appear on the VAT 655 for each line on the VAT 641.