Value Added Tax Act 1994 Schedule 9ZE paragraph 17

Assessments in connection with increase in consideration: modifications

Paragraph 17 of Schedule 9ZE modifies the rules on HMRC assessments and penalties so that they apply where a business fails to account for additional VAT arising from an increase in the price of a UK supply.

• Where a business fails to amend its return or notify HMRC about additional VAT due from an increase in the consideration for a UK supply, HMRC may assess the VAT due to the best of their judgement.
• The assessment relates to the VAT period in which the original supply was accounted for, and must be made within the general time limits or within 2 years after the end of that period — or, if later, within one year after HMRC obtain sufficient evidence to justify making the assessment.
• If further evidence comes to light after an initial assessment has been made, HMRC may make an additional assessment on the same basis, subject to the overall statutory time limits.
• The existing rules on assessing penalties, interest and surcharges are extended so that they also apply to assessments made under this provision.