VAEC2970 - Section 73(1) and 73(2) assessments: Inaccuracies and amendments to potential lost revenue (PLR)

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.

Inaccuracies are tested for penalty purposes against an objective base known as potential lost revenue (PLR). Full guidance on the calculation and use of PLR can be found at CH82150.

PLR is not a static amount but changes every time an error is discovered, amended or withdrawn.

For assurance officers this means that you cannot ignore errors that the trader has worked through their accounts until there is no eventual tax loss. You need to take corrective action to get the tax into the right prescribed accounting period. Bearing in mind the resources involved, you should try to establish the correct amount of tax for each period to be able to

• fix an accurate basis for any penalty which has already been assessed, is now to be assessed, or may be assessed in the future
• calculate interest, on any under declared or over claimed tax, even where the trader has brought tax to account from an earlier period to a later one.