CH146440 - Interest: repayment interest: special provisions for VAT: period for which an amount of VAT credit carries interest where there are other outstanding VAT returns - example.
You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details
Micah’s monthly VAT repayment return for the accounting period 1 February 2023 to 28 February 2023 is due by 7 April 2023. He submits it on 7 April and this gives rise to a VAT credit of £100,000.
However, Micah has not submitted the return that was due on 7 February 2023. Micah submits this return on 10 April 2023. He has no other outstanding returns.
HMRC pays Micah the £100,000 VAT credit on 15 April 2023.
Paragraph 12E(1)(a) of Schedule 54 to the FA2009 provides that repayment interest is not paid for the period during which the return due on 7 February 2023 had not been made. This return was made on 10 April 2023 so 6 days repayment interest is payable for the period 10 April 2023 until 15 April inclusive.