VAEC5120 - Recovery assessments: Section 80B procedures
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.
Processing and notification of assessments to recover section 80 credits/payments, under Sections 80B(1) and 80B(1B)
Prepare Form VAT 641 as normal for input to VALID. Set interest inhibit for all lines subject to the Section 80B(1) and or Section 80B(1B) assessment(s) to prevent the automatic calculation of default interest.
The amount should be allocated to the original periods covered by the section 80 claim. This is an accounting mechanism only and serves to update/restore the trader’s accounting main file record.
You are not making an assessment for the “original” periods. The VAT 641 should be marked “For accounting purposes only”. The output documents produced as a result of processing the VAT 641 must be suppressed and the trader notified of the recovery assessment(s) by letter.
Notification of assessment(s)
Whether your assessment is made under Section 80B(1) or under Section 80B(1B) or both, it should be notified by letter VAT(LC)29: Recovery assessment - Section 80B, which is available on SEES, not by the computer generated notifications.
This is because the wording on the computer-generated form is inappropriate. Input of the VAT 641 serves only as an accounting mechanism to update the trader’s accounting main file record.
It is recommended that you give advance warning to your VALID team to intercept the computer generated documents that will arise after processing the VAT 641, i.e. VAT 655 and VAT 667.
In addition, the normal VAT 34 Assessment Notes should not be despatched to the business. Although sending the normal assessment output documents will not invalidate the assessment, they are likely to confuse and may cause unnecessary complaint.