HMRC VAT Inspections & Assessments
HMRC VAT inspections can be disruptive for businesses, especially when they ultimately result in assessments for underpaid VAT, and the potential applications of penalties. The team of VAT specialists at The VAT People can offer advice and support to companies that have been impacted by an HMRC assessment and are here to help you sort through this complex process.
Our qualified advisers have decades of experience and knowledge on all aspects of VAT regulations and are best placed to discuss any assessments or penalties your business is facing as a result of an HMRC inspection. We can offer advice on whether the assessment was justified, and whether HMRC’s decision fairly reflects all of the facts presented.
Whether you agree with the outcome of your assessment or simply want to know more about the process, we can provide the best possible advice and a thorough review of your case. To discuss your circumstances, contact The VAT People today by calling 0161 477 6600, or fill out an online enquiry form and we will get back to you at a more convenient time
How can we help you
We are the expert of choice for countless organisations faced with an HMRC inspection, and there are a number of ways in which we can help if the prospect of a VAT assessment and penalties has been raised.
At The VAT People, we can offer support and advice at every stage of the appeal process. Our method involves:
- Considering whether the VAT assessment is justified, and whether it has been made with HMRC having access to all of the facts
- In cases where all the facts are evident, investigating whether or not HMRC is applying an incorrect interpretation or failing to work within prescribed time limits
- Helping clients to challenge incorrect or flawed assessments, including making appropriate representations to HMRC or, where necessary, making appeals to tribunals
- Providing specialist advice and assistance, and supporting you in rebutting assessments when there are reasonable grounds to do so
Challenging any penalties that HMRC may seek to apply. Read more about specific VAT penalties
In many cases, we have been able to reduce or entirely remove assessments and/or penalties handed down by HMRC, so by getting in touch with us we may be able to make a significant difference.
FAQs
What should I do when I disagree with a VAT decision?
If you disagree with or have a query about a VAT decision, it is up to you to investigate its full details and decide whether or not to make an appeal against it - this must be done within 30 days following HMRC's notification of its decision.
You will receive a letter from HMRC containing details of the decision, including information on whether you are able to appeal.
At The VAT People, our experienced, knowledgeable team can provide your business with VAT assessment appeal assistance that helps you reach the best outcome for your situation.
Are late appeals allowed?
Late appeals can be allowed, but only in certain circumstances where there is a reasonable excuse. If a business is unable to meet the standard 30-day deadline to appeal an HMRC decision, they must request an extension at the earliest opportunity. The tribunal has the discretion to accept or reject late appeals, depending on the reasons for the delay.
How can I make an appeal to HMRC?
If you disagree with HMRC’s response to an assessment, you can take the following actions:
- Ask for an independent review of HMRC’s decision, whereby written representations are provided and reviewed by an officer not involved in the original decision. In most cases will take up to 45 days to complete, after which you will be informed of the outcome
- Ask a tax tribunal to hear your appeal
- Consider alternative dispute resolution
The method by which a business may contest an assessment raised by HMRC will be dependent on a number of factors, including the nature of the matter forming the basis of the assessment - the available options will be set out in the decision letter issued by HMRC.
What triggers an HMRC investigation?
HMRC may initiate a VAT inspection for various reasons, often based on perceived risks or inconsistencies in your VAT returns. Common triggers include late or inaccurate VAT filings, or significant fluctuations in VAT liabilities.
Random checks can also occur, particularly for businesses operating in high-risk sectors or those that have recently registered for VAT. If your business has previously made errors that have led to the application of penalties, HMRC may be more likely to review your records. In some cases, inspections are prompted by third-party reports or industry-wide investigations.
What are the time limits that HMRC can make assessments within?
HMRC operates under specific time constraints when issuing VAT assessments, primarily determined by the nature of the taxpayer's behaviour and the timing of evidence discovery:
- Two-year rule: HMRC can make an assessment within two years from the end of the prescribed accounting period in which the VAT was due.
- Four-year rule: if the two-year VAT assessment time limit has passed, HMRC can still assess within four years from the end of the relevant VAT period. However, such assessments must also be made within one year from the date when sufficient evidence to justify the assessment comes to HMRC's knowledge.
- Twenty-year rule: in cases involving deliberate tax evasion or fraud, HMRC has up to 20 years from the end of the prescribed accounting period to make an assessment. Similar to the four-year rule, these assessments must also be made within one year from the date when sufficient evidence comes to HMRC's knowledge.
How we can help
We are often called upon when a client is faced with a VAT assessment from HMRC. Such an assessment of VAT can involve penalties, but there are a number of ways in which we can help.
Firstly, we will need to consider whether the VAT assessment is justified, and whether it has been made with HMRC having access to all the facts.
In cases where all the facts are evident, we can often find that HMRC are not applying the correct interpretation, or not working within the prescribed time limits. We regularly present clients in challenging incorrect or flawed assessments (such as those arising as a result of a VAT inspection), including making appropriate representations to HMRC or, where necessary, making appeals to VAT tribunals.
We can provide the specialist advice and assistance that you will need, and, if we feel that there are reasonable grounds to defend the assessment, we will rebut the assessment on your behalf.
We have been able to reduce or remove the assessment in many cases. To discuss your case with a VAT expert, contact The VAT People today by calling 0161 477 6600, or fill out an online enquiry form and we will get back to you at a more convenient time.
Contact Us
Are you looking for guidance on HMRC VAT assessments, VAT disputes or accurate VAT reporting? Get help with all aspects of your business's VAT from an industry expert - we have almost 20 years of experience helping businesses of all sizes and within all sectors to comply with HMRC's standards and save on their VAT costs. Contact The VAT People today by calling 0161 477 6600, or fill out an online enquiry form and we will get back to you at a more convenient time.