HM Revenue & Customs (HMRC) has published new internal guidance on its policy on claims for interim (re)payments of VAT to businesses where verification of the claim is continuing, or where a decision not to allow recovery of input VAT is subject to litigation.
HMRC’s stated policy is to treat each case on its merits. This policy is unchanged by the publication of the new guidance, which includes a summary of the circumstances in which HMRC considers it appropriate not to pay a VAT credit in whole or in part. These circumstances include where there is a missing VAT return for an earlier period and where an intending trader has yet to make any VATable supplies.
The guidance also considers HMRC’s discretion to make an interim payment before or after an enquiry into the existence of a VAT credit, and details the minimum level of information and documentation to be provided by a trader, together with the other circumstances to be considered, before the discretion should be exercised and an interim payment made.
Interim payments will form a significant element of cashflow for many traders. It is essential that they seek specialist advice to secure the receipt of any interim payments of VAT as early as possible.
If you need further information, please contact Vaughn Chown using the online form below.