Value Added Tax Act 1994 section 73

Failure to make returns etc.

Section 73 deals with HMRC's powers to assess VAT when returns are missing, incomplete or incorrect, and to recover overpaid refunds or credits, including the time limits and procedures for making such assessments.

• HMRC may assess VAT to the best of their judgement where a person fails to make returns, fails to keep proper records, or submits returns that appear incomplete or incorrect, and notify the person of the amount due.
• Where a VAT repayment, refund or credit has been paid or credited to someone that should not have been — whether because it was wrong from the outset or because the facts later turned out differently — HMRC may assess that amount as VAT due for the relevant period, and this power extends to amounts wrongly paid before a person's VAT registration was cancelled.
• Assessments must be made within the time limits in section 77, and in any event no later than two years after the end of the accounting period concerned or one year after HMRC obtain sufficient evidence to justify the assessment, whichever is later; further assessments may be made if new evidence emerges.
• Once an assessment has been notified, the amount is treated as VAT due and is recoverable unless the assessment is subsequently withdrawn or reduced, subject to any appeal rights under the Act.