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VAT repayment & deferred VAT due to COVID

VAT repayment used to offset deferred VAT where client had already signed up to deferral scheme

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I have a client who deferred their VAT for the April 2020 quarter and then signed up to pay  over 10 months in accordance with the scheme rules. They have made all their instalments by DD at the correct time so they are not in arrears. 

This is a construction client so their last 2 VAT returns since the CIS reverse charge was introduced have been repayment returns.  Last quarter's was only a small amount and HMRC withheld payment and offset it against the deferral return.  The client wasn't very happy about it but it was a relatively small amount so wasn't worth arguing about.   I have submitted the October 2021 return and it appears that HMRC have again taken this repayment against the deferred return. I can't find any guidance on this apart from the generic 'repaymens will be offset against existing debts' but when there is a special arrangement in place I didn't expect that subsequent repayment returns would be witheld?

Does anybody have any experience of this?  Have you managed to get the revenue to issue the refunds for your clients? 

My client was banking on the refund coming back as he's just been hit with a hefty bad debt! 


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By Paul Crowley
03rd Dec 2021 18:52

Client is not the only one
Similar thread of a separate tax stolen to be set off by HMRC on a VAT deferment was posted less than a week ago

Given that HMRC have given uptrying to reclaim and recover on the corona support grants. this does seem inappropriate

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By lionofludesch
03rd Dec 2021 23:26

Just accept it as you won't change their minds.

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