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HMRC internal manual

VAT Assessments and Error Correction

Recovery assessments: Default interest on recovery of VAT credit

The legal powers for charging interest on recovery of VAT credits are in Section 74 VAT Act 1994, the same provision as for any other assessment under Section 73. The power to assess a liability to interest arising under Section 74 is contained in Section 76.

Time limits

The time limits for assessments to default interest are contained in Section 77(2) and 74(3) VAT Act 1994.

Full guidance on default interest, and the circumstances in which it may be appropriate, see VCP10890.