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Point of view
Key points
- VAT practitioners need to be aware of the one two four and 20-year time limits – it was the one-year rule which was the focus of the Supreme Court in DCM.
- The one-year rule looks at when HMRC had ‘evidence of facts’ which were sufficient to raise an assessment.
- The Supreme Court emphasised that whether ‘evidence of facts’ have come to HMRC’s knowledge is a test of actual rather than constructive knowledge.
- To determine when an HMRC officer has evidence of facts it is necessary to look at when the officer possesses the last piece of evidence of sufficient weight to justify making the assessment.
- The Supreme Court has also vindicated HMRC’s approach to verifying and potentially reducing VAT credits in advance of payment.
- HMRC’s approach to credits protects tax revenue but can be frustrating when it results in significant delays to payment of legitimate...
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