Insolvency practitioners on for VAT refund

Insolvency practitioners who provide services for individual voluntary arrangements (IVAs) may be able to reclaim VAT from the taxman following a recent tribunal ruling, reports Nick Huber.

But supervisors of company voluntary arrangements and partnership voluntary arrangements who make similar claims based on the recent Paymex case will be wasting their time.

That’s the message from HMRC in its latest guidance on when insolvency practitioners should be exempt from VAT. In June, HMRC lost a tax tribunal case against Paymex, a debt solutions company, over VAT charged on individual voluntary arrangements (IVAs).

The tribunal ruling means that insolvency practitioners can claim for a refund from HMRC from previous IVA cases where VAT was charged. It also means that IVA providers can claim that IVAs made in future should be exempt from taxation.

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