When traders miss the deadline for filing a VAT return, a ‘central assessment’ is raised by HMRC’s system. This is also known as a ‘VAT notice of assessment of tax’.
A central assessment estimates the VAT liability due to HMRC on the outstanding VAT return. The estimate is usually based on the VAT amount owed on previous returns. Other methods of estimation may be used where HMRC does not have historic data.
Source: ICAEW
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