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HMRC internal manual

VAT Government and Public Bodies

Section 33 bodies: registration and accounting: interest penalties and repayment supplements

Any delays by HMRC in repaying claims attract repayment supplements subject to the normal conditions - see Notice 700 ’The VAT Guide’(external users can find the notice at…
document&columns=1&id=HMCE_CL_001596). Supplements are calculated on the full amount of the claim, including both business and non-business activities. Where VAT has been overpaid or under-claimed statutory interest may be payable in accordance with section 78 of the VAT Act 1994 However, no interest can be paid on an amount increased by a supplement or on the supplement itself.

Unregistered bodies might, however, be liable to inaccuracy, FTN or wrongdoing penalties.

Any interest or penalties due as a result of errors made on VAT returns or late submission or payment of returns, is calculated on the full amount of VAT involved, including VAT attributable to both business and non-business activities.