Tag Archives: VAT-overpayment

Repayment interest on VAT credits or overpayments – Update

By   6 February 2024
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HMRC has updated its guidance on when repayment interest is due.

If a business has claimed more input tax than it has declared output tax (a repayment return) HMRC will repay the difference by making a VAT repayment. HMRC will also repay any VAT that has been overpaid in error. Repayments are usually made within 30 days. The 30 days starts from the day HMRC receives the VAT Return and ends the day your repayment is approved (not the day it is received). HMRC does not count days taken to check the return is accurate and legitimate, and to correct any errors or omissions, as part of this 30-day period.

If HMRC is late in paying, a business may be entitled to repayment interest on any VAT that it is owed. For accounting periods starting on or after 1 January 2023, repayment interest replaces the repayment supplement.

A business, or its agent can track a VAT repayment online.

Update

Information on eligibility criteria for repayment interest on overpayments and start dates when VAT is not paid to HMRC has been amended. Information on repayment interest end dates when HMRC sets it off against your debts has also been updated.

VAT: Evidence for retrospective claims – new guidance

By   14 March 2023
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HMRC has updated its Manual VRM9300 on historic VAT claims.
These types of claims are often called “Fleming” claims and refer to those made before the introduction of the four (once three) year time cap. Such claims extend beyond the period that businesses were required to keep business records and so these were less likely to have remained available.

Standard of Proof where records are unavailable

Where detailed records are unavailable it does not mean there is a lower standard of proof for a claim. The civil standard of proof (on a balance of probabilities) remains.

However, taxpayers’ estimates, assumptions and extrapolations must be sufficiently robust to support a claim. HMRC and the Tribunals must have regard to the evidence that is available, and each claim must be considered on its individual merits.
HMRC state that it “…is not obliged to accept a figure simply because some input tax is due or because it is the claimant’s ‘best guess’ based on the material available”. The claimant must first establish that its method of valuing the claim is reasonable and provide an identifiable repayable amount.
The guidance considers the judgement in the NHS Lothian [2022] UKSC 28 case and its impact on claims where full evidence is unavailable.
Alternative evidence
It is also worth noting that HMRC have the discretion to accept alternative evidence.

VAT: Events cancelled due to coronavirus

By   18 March 2020
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Coronavirus measures

In these difficult times things aren’t as they usually are. While there have been no specific government announcements of any VAT reliefs, one issue has arisen.

Refunds

If a venue is required to cancel an event as a result of the government’s advice on coronavirus eg; live performances, seminars, weddings, festivals etc, and the venue suggests that ticket holders might like to donate the money previously paid to charity rather than receive a refund – we can confirm that no VAT is due on any of the transactions.

This is the case in situations where the;

  • event does not take place
  • customer is entitled to a full, unfettered refund
  • refund changes to a genuine voluntary donation

Adjustment

If output tax has been accounted for the next return may be adjusted to credit the tax previously paid. if a refund is made directly to the customer, again, no supply will have been made for VAT purposes and no output tax is due.

Commentary

In these difficult times we appreciate that tax is way down the list of people’s priorities. Many businesses will suffer and many will not survive. If we can help in any way possible, please let us know.

Also, we will report if there are any concessions on VAT payments or similar as soon as we are aware. We recommend that the HMRC guidance on coronavirus should be monitored for the latest news.

Good luck out there and stay safe.