What is a VAT Assessment from HMRC?

Find out what a VAT assessment letter from HMRC means for you and why it has been issued, including what you can do to appeal your assessment.

Updated 6 August 2021

1. What is a VAT Assessment?

A VAT assessment is issued by HMRC when you miss filing a VAT return. It is an estimate of how much VAT they believe you owe, based on the information they have on your business for example from previous VAT quarters.

2. Can You Appeal a VAT Assessment?

If you have received an assessment and you notice that it is lower than your true VAT liability, you have 30 days to submit the missing VAT return. After 30 days, HMRC will charge you VAT penalties until you submit your missing VAT return.

3. Do You Have to Pay a VAT Assessment?

A VAT assessment is a demand for payment and should not be ignored so you need to pay the demand. The best course of action is to submit the missing VAT return and any payment due immediately.

If your assessment is too high then, unfortunately, you can’t do anything to lower it.  You must just send in the missing VAT return and pay the overdue VAT to sort things out.

A VAT assessment is not a penalty, it is an estimate of how much VAT HMRC think you owe them.  Once you have submitted your late VAT returns, HMRC may calculate how much additional VAT surcharges and interest you owe based on how late your VAT returns and payments are.



About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek and money nerd helping financial DIY-ers organise their money so they can hit their goals quicker.