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Repayment Supplement

10th Mar 2014
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HM Revenue & Customs have won a significant Upper Tier decision relating to the VAT Repayment Supplement.

The First Tier Tribunal had held that a Repayment Supplement (RS) could be due where HMRC fail to process a Voluntary Disclosure claim within a reasonable time period. The taxpayer had claimed £74,000 in RS which HMRC had withheld. HMRC had argued that RS was only due in relation to a VAT Return, even though the legislative wording read ‘return or claim.’ The taxpayer, quite understandably, argued that this must also include Voluntary Disclosure claims. The First Tier agreed with the taxpayer.

The Upper Tier Tribunal has overturned the decision. It held that RS can only apply to a VAT Return, where HMRC have unreasonably delayed repayment.

The decision must be one of the shortest ever seen, running to less than ten pages. Further, the decision does expose the poor wording of VAT Act 1994, s79. Having re-read both decisions, and the legislation, I can see that both conclusions are valid.

I would be surprised if the matter were to go further.

However, where a taxpayer is out-of-pocket doe to HMRC error or delay, then a claim for interest may be made. This is provided for in s78. Perhaps, as advisers, we should be more aware of this provision, and quicker to take advantage on behalf of our clients?

http://www.bailii.org/uk/cases/UKUT/TCC/2013/595.html

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Replies (2)

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By JL
25th Nov 2015 21:33

Thank you - very helpful

I've tried to find the rates on HMRC's website but quelle surprise, there is nothing there!

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By Henry_8
14th Nov 2019 10:27
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