How Far Back Can HMRC Go in a Tax Investigation ?

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    I have recently received a letter from HMRC about assessments for purported underpaid output VAT of £120,000 in my VAT returns periods going back 10 years ago. I have completed the VAT returns as accurately as i can and i dont think the documents requested are available – who will keep documents for 10 years? How Far Back Can HMRC go in a Tax Investigation ?


    HMRC requires you to keep all your business records for VAT purposes for at least 6 years.

    In normal cases, the HMRC tax investigation time limit is 4 years, in which they can go back to claim money from taxpayers.

    The maximum period for HMRC to raise an assessment is four years from the end of the VAT return period to which the assessment relates. However this period only increases (to 20 years) in cases of fraud or dishonesty – clearly not the case here!

    Applying the four year time limits to this assessment, it is clear that the period covered extends beyond the four years allowed. Therefore the assessment are out of time and are not valid.

    In light of the above, you should write to HMRC challenging the assessment. This can be done as part of a reconsideration request; OR you can choose the option of appealing the assessment to the First Tier Tax Tribunal.

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