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HMRC internal manual

VAT Assessments and Error Correction

Demand for VAT: Assessment is not appropriate: VAT understated on self billed documents

If a self-billed invoice understates the VAT chargeable on a supply, Section 29 of VATA 1994 provides that, following the service of a Notice on the customer and supplier, HMRC may require the customer, who would be the person issuing the self-billed document, to pay the understated VAT.

The purpose of this legislation is to ensure that a self-billing trader accepts responsibility for the correct tax liability of the supplies to which his invoices relate.

The amount shown on the Notice is seen as a debt due to the Crown and is recoverable under the VATA 1994 Schedule 11 paragraph 5(1), see VAEC9600.