Review a VAT assessment

Reviewing a VAT assessment or VAT penalty can be of benefit. Following protracted enquiries by HMRC between July 2023 and April 2025 a business received a series of VAT assessments over 8 VAT quarters for over £200,000. The businesses accountants had been unable to resolve the issues with HMRC.

One of our VAT assessment consultants was approached by the business who suggested approaching HMRC to review a VAT assessment.

The business was using cash accounting and supplying a variety of food and confectionary to be consumed on the premises or taken away. Third parties such as Uber Eats, Just Eat and Deliveroo were used to deliver some sales.

Notice to produce documents

At one point prior to our firms involvement in the case HMRC seem to have become frustrated by the lack of progress and issued a Notice to produce various documentation. Indeed, a £300 penalty was imposed and paid. The requested documentation such as bank statements, purchase invoices and VAT reports were then provided to HMRC.

Assessment out of time

The time limit imposed on HMRC when raising assessments can be important. The VAT Act 1994 Section 73(6) allows for assessments to be made either within two years of the period end or within one year of evidence of facts to justify the making of an assessment becoming known to HMRC.

The assessments in the case of this client were initially described by HMRC as “protective assessments”. As part of the VAT review HMRC accepted that the “protective assessments” had not been properly “made”.

Subsequently assessments for the same periods were made although HMRC agreed that the vast majority of periods in question ended more than two years prior to the assessments being made. Eventually HMRC accepted that no additional information had been received in respect of those periods within one year. As such these assessments were accepted as being “out of time”.

Best judgement

As a result of our VAT specialist submissions the issue as to whether or not the assessments had been issued using “best judgement” was also considered when reviewing the VAT assessment. In calculating the assessment all of the businesses sales were treated as subject to VAT at the standard rate whereas it was clear that some sales were in fact zero rated. No allowance had been made in respect of the zero-rated sales and it was accepted by HMRC that such an allowance should have been made.

Relevant case precedents

Van Boeckel v. Customs and Excise Commissioners [1981] STC 290

Pegasus Birds v HMRC [2004] STC 1509; [2004] EWCA Civ 1015

Contact Solve VAT

Our VAT assessment consultants can be contacted on 0161 883 2120.