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What is best judgement?

HMRC is required to use raise assessments for VAT using its ‘best judgement’. However, the burden falls on the business to prove that HMRC has not issued an assessment using its best judgement.

The principles regarding what constitutes best judgement are taken from a High Court decision in Van Boeckel where the following benchmark was established.

HMRC:

1. •

   is not required to do the work of the taxpayer

2. •

   must perform its duties honestly and above board

3. •

   must fairly consider all material put before it and based on that material make a decision that is reasonable and not arbitrary

4. •

   must be in possession of some material upon which it can base its best judgement

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