There are time limits within which HMRC must assess VAT, interest or a penalty.

Generally, the time limits from 1 April 2010 for VAT assessments and claims are:

(1)normal time limit – four years

(2)careless behaviour – four years

(3)deliberate behaviour – 20 years

from the end of the relevant tax period (HMRC Brief 16/2010 (19 March 2010); HMRC VAT Assessments and Error Correction Manual at VAEC 6080).

In particular, HMRC no longer have 20 years to assess where a tax loss was attributable to negligent conduct which equates to careless behaviour.

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