VAEC1130 - Powers of assessment: VAT assessment powers: »Ê¹ÚÌåÓýapp law supporting time limits
Time limits for assessments under Section 73(1) and 73(2) VATA94
»Ê¹ÚÌåÓýapp rules governing time limits are the same whether an assessment under Section 73 is
- For a net under-declaration you have discovered on a VAT return
- A prime assessment raised manually, or automatically by the central computer, because a business has failed to render a return, or
- An additional assessment following an earlier prime assessment, see VAEC2100.
»Ê¹ÚÌåÓýappre are time limits to consider when determining the date by which an assessment must be made although HMRC rely on the date of notification as the material date for time limit purposes, see VAEC1120.
»Ê¹ÚÌåÓýapp normal time limits for assessing are contained in VATA94 section 73(6). »Ê¹ÚÌåÓýappy are:
�2 years after the end of the prescribed accounting period; or
One year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge.�
»Ê¹ÚÌåÓýappse are commonly known as the ‘twoâ€� and ‘oneâ€� year rules. »Ê¹ÚÌåÓýapp two year rule is the standard rule that is used.
With effect from 19t h March 08, assessments raised under Section 73(2) have an amended two year time limit start date.
In the case of an assessment under this subsection, the relevant prescribed accounting period is the prescribed accounting period in which the repayment or refund of VAT, or the VAT credit, was paid or credited.
NOTE: »Ê¹ÚÌåÓýapp four and twenty year capping restrictions described at VAEC1140 must always be considered when you are assessing under the one year evidence of facts rule.