VAEC4011 - Recovery Assessments: Following a mistake of law

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.

You may need to assess periods where returns have been submitted on the basis of a court ruling which has since been overturned in HMRC’s favour. These are ‘normal’ assessments made under Section 73(1) or 73(2) VATA 1994.

Assessment time limits cannot begin to run from the date of the court judgement or its delivery. There is however continuing uncertainty about

• which prescribed accounting period should be addressed when a recovery assessment is made under S73(2)

If your assessment follows resolution of a legal dispute about the VAT treatment of a supply, or entitlement to input tax, you should always pay regard to any specific guidance given by the appropriate liability team prior to assessing.

If you are in any doubt as to whether recovery action is appropriate, you should seek their advice in advance.