V5.251 Verification of output tax
Output tax is calculated from the sales recorded in a person's accounting records. HMRC officers will typically want to determine three main objectives:
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(1)ÌýÌýÌýÌý that recorded sales are complete and correct
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(2)ÌýÌýÌýÌý that output tax has been correctly charged (where VAT invoices are rendered) or calculated (where a retail scheme or used goods scheme is used), and
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(3)ÌýÌýÌýÌý that the amount chargeable has been correctly accounted for in the person's VAT return
1. Recorded sales are complete and correct
Work done under this area may fall under a number of headings and the means adopted in a particular case will naturally depend upon the type of business, the records available, and 'audit trail' information obtained from outside sources. The below sets out common types of checks, and key areas arising from relevant case law.
Macroeconomic analysis
Generally speaking, however, HMRC appears reticent to estimate either output tax or input tax by extrapolation from data on particular business sectors. But this
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Web page updated on 17 Mar 2025 15:28