Changes to HMRC’s Late VAT Returns Assessment Process: Why Detailed Records and Prompt Action are Crucial

• HMRC is changing the central assessment process for late VAT returns in the UK.
• When a taxpayer fails to file a VAT return on time, a central assessment is automatically raised by HMRC’s system.
• The assessment is an estimate of the VAT that would have been payable if the return had been submitted.
• Assessments are often higher than the actual VAT payable, so taxpayers are encouraged to submit the return promptly to avoid higher amounts.
• In some cases, the assessment may be lower than the actual VAT payable, but taxpayers must notify HMRC within 30 days or face penalties.
• Previously, taxpayers were advised to submit the actual VAT return as soon as possible to cancel the assessment, but now the assessment remains until the return is fully processed.
• Taxpayers should prioritize submitting the outstanding VAT return promptly and consider paying the assessment if cash flow allows.
• Keeping detailed records and screenshots of the VAT return submission is advised in case it is needed to show HMRC.

Source: accountingweb.co.uk

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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