How to Challenge an HMRC VAT Assessment 

Navigating the complexities of VAT assessments can be daunting, especially when dealing with HMRC (Her Majesty’s Revenue and Customs). If you have recently received a VAT assessment that you believe is unjust or incorrect, you might be wondering what steps you can take to contest it. In this guide, we will walk you through the essential elements to keep in mind when you are challenging an HMRC VAT assessment. 

Grounds for Appeal 

You have the right to appeal an HMRC VAT assessment. However, simply stating that the assessment is incorrect is not sufficient. You must provide specific reasons or grounds for your appeal. This could include demonstrating that HMRC did not exercise its “best judgement” in arriving at the assessed amount. 

What is “Best Judgement”? 

According to HMRC guidelines, officers must use their best judgement when issuing VAT assessments. This involves a comprehensive evaluation of all known factors affecting your business, including turnover, type of goods sold, and market conditions. If the assessment appears to be arbitrary, it may be grounds for an appeal. You can ask for an explanation as to how the inspector has arrived at the conclusions given to make sure that you agree that best judgment has been used. 

Unknown Factors 

There could be unknown factors affecting the VAT calculation, like discounts offered to customers, stock write-offs, or wastage. Make sure to verify the VAT rates applied to your sales and the overall arithmetic. Incorrect calculations can serve as additional grounds for appeal. 

30-Day Window for Appeal 

Time is of the essence when challenging a VAT assessment. You have just 30 days from the date of the assessment to either appeal or request a formal review. It is crucial to act quickly to ensure your case is heard. 

Poor Methodology 

If HMRC used flawed methodology to arrive at your assessment, you could have a compelling case for an appeal. For instance, in the case of Hodges v HMRC [2015], HMRC’s methodology was significantly flawed, leading the court to favour the appellant’s own calculations instead. 

Get Expert Advice 

When challenging an HMRC VAT assessment, it is often beneficial to consult professionals experienced in VAT and taxation issues. Our internal team, led by Jane, is available to help you navigate the complexities of VAT assessments and appeals.  

Contact Jane Deeks for Further Assistance 

For personalised advice tailored to your situation, you can reach out to Jane at:

jane@deeksvat.co.uk

‭+44 7710 553831‬

With her extensive experience in VAT consultancy, Jane can provide you with the insights you need to make an informed decision.