VAEC2160 | Types of assessment: Prime assessments information: Inhibit issue of assessments for first periods

For information about retired VAT systems, go to VAEC0150. For information about Making Tax Digital for VAT and ETMP processes, go to VAEC0200.

In some cases the liability of a prescribed accounting period, or part of it, may be known to us before an automatic prime assessment is made.

This can happen where, for example, we compulsorily register a business which failed to register at the correct time.

In such cases, a form VAT 704 must be input to inhibit the automatic issue of a prime assessment should the trader fail to submit his first period return.

Input of the VAT 704 will cause a Batch 58 action notice, see VAEC2210, to be sent to the local office if the return is missing at the enforcement run. The local office should then make a manual prime assessment taking account of the information held.

Once the assessment has been issued the enforcement suppression must be lifted, otherwise it will inhibit future assessments.

Failure to inhibit the automatic prime assessment where better information is available will put HMRC at risk as the assessment may not meet the best judgement criteria and will consequently be invalid. Issuing an additional assessment to top up the computer calculated prime assessment will not be acceptable if you already held the information at the time the prime assessment was made.

This can be seen in the case of Allan Bennett LON/96/907, see VAEC2161.

In cases where we fail to inhibit the automatic assessment and it is made and notified in error, the assessment must be withdrawn and a fresh manual prime assessment made and notified.