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HMRC internal manual

VAT Assessments and Error Correction

Demand for VAT: Recovering a debt to the Crown: Incorrectly deducted input tax

Where the Extra Statutory Concession, see VAEC9670, does not apply, consideration should be given as normal to referring the case to the appropriate regional office for assessment action against the customer to recover the input VAT claimed.

For example

  • if no supply has been made,
  • the customer has not acted in good faith, or
  • has received the invoice from a taxable supplier.

Interest is not normally inhibited, but there may be a need to inhibit any penalties.