No explanation

Best judgment to assess a difference on the company’s accounts

An HMRC compliance officer compared the turnover of the taxpayer’s accounts with the output tax on its VAT returns for the years ending 31 July 2009 to 2011. He raised an assessment for £27 768 because more sales were recorded in the accounts than on the VAT returns. It was reduced to £17 614 because only the final quarter of 2009 was in time under the four-year assessment rule (VATA 1994 s 77). The assessment was raised on the basis of s 73(1) which gives officers the power to ‘assess the amount of VAT due … to the best of their judgment’.

The taxpayer’s accountant was not available to explain the differences to HMRC or the tribunal because of a ‘personal tragedy’ but the tribunal said the Revenue officer had done everything expected of him to produce a...