Repayment of input tax: Extra-statutory concession for insolvency practitioners
This was introduced on 10 February 1998 and announced in BB 05/98 following representations from various organisations, such as the Society of Practitioners of Insolvency, and the Insolvency Division of the Department of Trade and Industry, claiming that “clawback” from 26 November 1996 (VAT Act 1994 section 36(4A)) could result in insolvency practitioners becoming personally liable to repay any input tax that had been reclaimed by a trader prior to the insolvency.
For supplies received from 26 November 1996 to 31 December 2002, under the terms of an extra-statutory concession, insolvency practitioners are not required to repay input tax where the business in insolvency received the supply prior to the date of the insolvency and the requirement to repay input tax occurs after the date of the insolvency subject to a number of conditions – seeNotice 48 Extra-Statutory Concessions.
The extra-statutory concession has been updated from 1 January 2003 to take account of the cessation of the requirement for suppliers to write notifications as a condition of making a claim for bad debt relief. This update is not yet shown in Notice 48.