If a company does not submit a corporation tax return, then HM Revenue and Customs will issue what they call a Determination. This is their estimate of the corporation tax that is due. If a business, which may be a sole trader or partnership, does not submit a Value Added Tax return, then the Revenue will issue what they call an Assessment. Again this is their estimate of the tax that is due. Both the Determination and the Assessment can then be acted upon by a debt collector. The Revenue sometimes have to deal with some very dilatory people, and this is their standard procedure.
If you are on the receiving end of a Determination or an Assessment, then you have no right of appeal!
What you should do instead is to file all the outstanding returns that are due, for which you probably need the help of an accountant. The return that you file is said to displace the Determination or the Appeal, and then your tax liability may revert to being what it really was. Note however that if there are penalties or surcharges on top of the Determination or Appeal, then normally these will be adjusted to match the actual return, but you should not be surprised at some level of penalty if you put in a NIL return.
Suppose that you don’t file VAT returns for a full year. The Revenue know that your turnover was at least £81,000 or you would have deregistered (September 2016 figures). You haven’t claimed any input tax, so your VAT liability must be at least £16,200. You will get an assessment for this or a higher amount, depending upon the previous history of your VAT returns. It should not take you by surprise.
What the Revenue may do on a first occasion is to send you a modest Assessment for VAT due. This can look reasonable so you pay it, but it does not affect your obligation to submit a VAT return. In subsequent quarters they will rack up the amount of the Assessment until you have to act. Basically if you fail to file your VAT returns, you are living in a fool’s paradise. See an accountant as soon as possible!
With corporation tax, an unpaid Determination is likely to lead to the company being wound up for insolvency. The company has limited liability. The directors can be disqualified, though, from being directors of other companies.