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VAT repayment return - long delay by inspector

Inspector holding repayment return hostage whilst he questions earlier periods

My small business submitted a repayment VAT return for period 09/17 (due to seasonality - other returns were payment ones).  The repayment was withheld subject to inspection, when the visiting officer came weeks ago to look at all the records and invoices relating to the period. 

He had questions about earlier periods, that I'm endeavouring to answer.  He keeps coming back for yet more questions, and now is asking about 2015.  However, not one of the questions is about 09/17.  Despite me asking explicitly if he needs anything else to verify 09/17, he ignores my point and just asks further questions about earlier periods (eg give me a copy of your purchase day book for 03/16). 

I'm getting him the answers, but does he have a right to hold on to 09/17 whilst he fishes around for problems in earlier periods?  We're a small business, and cashflow is being badly affected by this.  I know I can claim repayment supplement in due course, but I need the repayment now.

Any thoughts about whether the inspector can withold a repayments return because he's investigating other periods?  I guess he could say he's holding onto 09/17 until he's satisfied we aren't fraudulent - but he's not even asking about 09/17!

Thanks

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14th Dec 2017 11:19

Your problem is that it is not easy to put pressure on HMRC. But do ask, by email, specifically why the P09/17 repayment is not being released.
Also, where there is an unreasonable delay, the only possible sanctions are Repayment Supplement of Statutory Interest. (Read more here: https://www.accountingweb.co.uk/community/blogs/leshoward/delayed-diy-re...)

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23rd Dec 2017 12:19

Thanks Les, I really appreciate your reply.

You're right of course, we can't put pressure on the inspector - he seems quite regardless of the time limits re repayment supplement, has continued to pursue questions about 2015 whilst holding 09/17 hostage, and appears to have trotted off for his Christmas hols without a care. We did ask, by email, why he was witholding 09/17 but he simply ignored the question. Quite outrageous, but we have no power to influence him.

Hope to resolve this in the New Year, and perhaps complain about his behaviour once its all wrapped up.

Thanks again

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