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HMRC internal manual

VAT Assessments and Error Correction

Recovery Assessments: Introduction

Recovery assessments are assessments which seek to recover refunds of VAT or statutory interest which have been wrongly paid or credited to a business.

The need to make recovery assessments can arise because a trader has previously made a claim by way of return or error correction which has been accepted and processed by HMRC but which is subsequently found to be an incorrect claim.

Recovery action is also often required following the release of a binding court judgement in which the interpretation of the law is decided in our favour.

The legal provision for making your assessment will depend on whether the amount to be recovered was wrongly paid or credited to the trader as a result of

  • an incorrect Section 80 VATA 1994 claim in respect of output tax
  • an incorrect claim for a VAT credit (S25 VATA 1994)
  • a combination of the above
  • a late claim to input tax (Reg. 29 SI 1995/2518)
  • the need to recover money repaid or credited following a mistake of law, see VAEC4011.