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HMRC internal manual

Securities Guidance

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HM Revenue & Customs
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Security as a condition of releasing a VAT credit: meaning of VAT credit

A “VAT credit” is defined in section 25(3) of the Value Added Tax Act 1994 as an amount which is due under that subsection.

“25 Payment by reference to accounting periods and credit for input tax against output tax

(3) If either no output tax is due at the end of the period, or the amount of the credit exceeds that of the output tax then, subject to subsections (4) and (5) below, the amount of the credit or, as the case may be, the amount of the excess shall be paid to the taxable person by the Commissioners; and an amount which is due under this subsection is referred to in this Act as a “VAT credit”.”

Paragraph 4(1A) of Schedule 11 does not therefore apply to any other kind of “repayment” such as a repayment claim under section 80 of the VAT Act (credit for, or repayment of, overstated or overpaid VAT), or a repayment claim under Part XX of the Value Added Tax Regulations 1995 (repayments to Community traders).

Paragraph 4(1A) of Schedule 11 does not apply where an interim payment is requested following the decision that there is no entitlement to a VAT credit.