VAEC2170 - Types of assessment: Prime assessments information: Withdrawal of assessment

The procedural guidance in this manual only covers the VAT Mainframe and VISION processes. For guidance on the Making Tax Digital and ETMP processes for fully migrated customers, see VAEC0200 and the Making Tax Digital for VAT compliance toolkit.

Prime assessments are only withdrawn in exceptional circumstances. To withdraw any assessment we need to be satisfied that it was fundamentally flawed.

The automatic computation of prime assessments is based on a defensible best judgement methodology without the need for resource intensive intervention.

In withdrawing prime assessments on the basis that they are flawed we are at risk of undermining the central assessment system. However, there must be circumstances were we know that the basis of a prime assessment in a specific case is unsound.

This will normally occur where we have failed to inhibit the issue of an automatic prime assessment in cases where we have some knowledge of the trader’s liability, for example, in compulsory registration cases.

Note: Once made, there is no technical facility to cancel a prime assessment from the mainframe system.

Notification

In cases where an automatic prime assessment is withdrawn and replaced with a manual prime assessment, its withdrawal, and the notification of the fresh assessment must be manually communicated to the trader.

To do this, issue a VAT152A: Notice of Assessment, which must be accompanied with the covering SEES letter VAT(LC)20: Withdrawal and replacement of assessment - return not received. The covering letter explains the withdrawal and replacement of assessments. Do not input a copy of the VAT152A via VALID, follow the account processing guidance below.

Account Processing

There is no available method to delete a prime assessment on the VAT mainframe. Therefore, as an internal accounting mechanism only, you must input form VAT641 for the difference (credit or debit) between the withdrawn and replacement assessment so that the liability on file for the period equals the amount of the fresh assessment.

The output documents produced from processing the VAT641 must be suppressed to prevent them being sent to the trader. To do this you must attach an EF note to the VAT 641 stating “Do not issue outputs - for accounting purposes only”. Your note must start with this message to ensure that it is clear on the preview pane showing the first lines of the attached notes. Additionally, you can also insert a suppression request message on the VAT641 in either the keying stamp box or the reason box.