- HMRC has the power to issue an assessment to recover underdeclared VAT
- The assessment must be made to the best of the inspector’s judgment
- Three tests must be met for best judgment to be employed
- The onus is on the appellant to disprove the assessment
- Challenging the quantum of a best judgment assessment is usually more successful
- Arguments can be made to reduce a best judgment assessment
- Best judgment is a reasonable process, not necessarily the most favorable conclusion
- Tribunals may substitute their own judgment for HMRC’s in the amount of the assessment
- Even if one aspect of an assessment fails the best judgment test, it may not invalidate the whole assessment
- It is difficult to argue that an inspector did not use best judgment
- To succeed on appeal, it must be demonstrated that the assessment was raised dishonestly, vindictively, capriciously, arbitrarily, spuriously, or wholly unreasonably.
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
