The following examples illustrate the application of the time limits on assessments.
Example 1: Time limit for assessing if no dishonesty
Albert underdeclared £6,000 of output tax on his VAT return for the period ended 31 March 2014. HMRC discovered the error and quantified the amount during an compliance visit on 1 June 2014. The underdeclaration was not dishonest. The trader died in 2017.
HMRC must assess the VAT underdeclaration by 31 March 2016, which is the later of:
(1)31 March 2016, being two years after the end on 31 March 2014 of the return period concerned; and
(2)1 June 2015, being one year after the compliance visit on 1 June 2014.