HMRC's view is that so called "Fleming" VAT refunds are taxable. However, some advisers are of the opinion that the refunds are not taxable as they fall outside the scope of corporation tax. Has anyone been successful in arguing this with HMRC so that the refund has been exempted from corporation tax?
Related resources
Replies (2)
Please login or register to join the discussion.
.
Probably taxable. Hmrc are systematically contacting those who haven't declared. There is a case going through courts on the point at the moment. Hmrc are "extremely " confident of success.
Three of the big 4 have accepted that it's taxable. Conceding the point hmrc.
There are no proper technical arguments to support the view that it's not taxable.
Definitely taxable
If I charge someone £100 + £20 VAT for service X and then realise I needn't have charged VAT on it so claim the £20 back from HMRC and don't pass it back to my customer, then the effect is that I've charged my customer £120 for service X. How can anyone suggest that only £100 is now taxable? There's only one group of people that are going to benefit from litigation on this, and they always benefit from litigation.