VAT - time limits for assessments and repayments
The measure
HMRC are able to issue assessments to businesses for underpaid (or overclaimed) VAT going back three years. The measure will ultimately extend that period to four years. Businesses will likewise ultimately be able to go back four years when making claims for overpaid (or underclaimed) VAT, rather than three years.
Who will be affected?
Potentially all VAT registered businesses.
When?
The change will involve a transitional period commencing on 1 April 2009 so that by 1 April 2010 the time limit will have risen gradually from three to four years.
Our view
This change is being made across all taxes so VAT time limits will be in line with those for other taxes.
