The following examples illustrate the application of the time limits on assessments.

Example 1: Time limit for assessing if no dishonesty

VAT assessment

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.

(VATA 1994, s. 73(6).)

Need help? Get subscribed!

To subscribe to this content, simply call 0800 231 5199

We can create a package that’s catered to your individual needs.

Or book a demo to see this product in action.