The Importance of Best Judgement in VAT Assessments: Understanding the Criteria and Challenges

• HMRC has the power to issue an assessment to recover underdeclared VAT
• The assessment must be made to the best of the inspector’s judgment
• Three tests must be met for best judgment to be employed
• The onus is on the appellant to disprove the assessment
• Challenging the quantum of a best judgment assessment is usually more successful
• Arguments can be made to reduce a best judgment assessment
• Best judgment is a reasonable process, not necessarily the most favorable conclusion
• Tribunals may substitute their own judgment for HMRC’s in the amount of the assessment
• Even if one aspect of an assessment fails the best judgment test, it may not invalidate the whole assessment
• It is difficult to argue that an inspector did not use best judgment
• To succeed on appeal, it must be demonstrated that the assessment was raised dishonestly, vindictively, capriciously, arbitrarily, spuriously, or wholly unreasonably.

Source: marcusward.co

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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