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HMRC internal manual

VAT Refunds Manual

Requirements of a claim: new claim or amendment

Having made an original claim, a claimant may make a follow up claim. It is important to establish whether the later claim is a new claim or an amendment to an existing claim.

Why is this important?

This makes a practical difference where, at a time when an in-time claim is still open, a subsequent claim is brought by the same claimant which is out-of-time unless it is treated as an amendment to the previous claim.

How to decide whether a claim is an amendment to an existing claim or a new claim

You will need to establish the scope of the earlier claim by examining:

  • What the claimant said they were claiming for in the claim letter.
  • What the claimant says they are claiming for in the later claim letter.
  • Whether the subject of the later claim can be said to fall exactly within the scope (within the contemplation) of what was being claimed in the earlier claim letter.
  • Whether the subject of the later claim is specifically, or implicitly, excluded from the scope of the earlier claim.

Nevertheless, you should not accept purported amendments to earlier claims as amendments to that claim unless the additional claim relates to the same subject matter as the earlier claim, and without extension to the facts and circumstances that were contemplated at the time the earlier claim was made.

Equally, where a person submits a claim, for example, for £1m, for output tax over-declared on the supply of s-type widgets, he cannot subsequently change the basis of the claim to make it one for e-type widgets and treat that as an amendment to the claim.

New claim

There are several situations that might constitute a new claim:

  • Any claim that follows a completed claim is a new claim. In its decision in University of Liverpool (VAT Tribunal decision 16769); [2001] BVC 2088, the VAT & Duties Tribunal described a completed claim as:

‘… a claim which:

(a) has been met in full by the Commissioners;

(b) has been met in part by the Commissioners and the time limit for appealing against the rejection of the remainder prescribed by rule 4(1) of the VAT Tribunals Rules 1986, as amended, has expired;

(c) has been met in part by the Commissioners, the taxpayer has appealed against the rejection of the remainder, his appeal has been determined either by the tribunal or a court and the time limit prescribed for appealing against that determination has expired or the appeal has been compromised;

(d) has been rejected in full by the Commissioners and the time limit for appealing against that rejection prescribed by rule 4(1) of the VAT Tribunals Rules 1986, as amended, has expired;

(e) has been rejected in full by the Commissioners, the taxpayer has appealed against that rejection, his appeal has been determined either by the tribunal or a court and the time limit prescribed for appealing against that determination has expired, or the appeal has been compromised.’

Once a claim has been paid, in part or in full, and there has been no appeal or any appeal has been determined, that claim is completed and any further claim in relation to those same accounting periods is a new claim.

  • A subsequent claim that includes reference to a different subject matter from the original claim, with extension to facts and circumstances that fall outside of the contemplation of the earlier claim is also a separate and new claim. For example, a company makes a claim on 17 March 2016 for output tax over-declared on the sale of X-Type Widgets, that claim can go back to the accounting period ending on 31 March 2012. If on 12 August 2016 the company makes a further claim for output tax over-declared on the sale of E-Type Widgets, this is a new and separate claim and can only go back to the accounting period ending on 30 September 2012 (assuming that the claimant is on stagger 1 - calendar quarters).
  • A second claim brought in respect of prescribed accounting periods not covered by a previous claim must be treated as a separate claim. For example, a claim is made on 17 March 2016 for periods ending between 31 March 2012 and 31 December 2015. When the claim is made, for whatever reason, the periods ending on 30 June 2012 and 30 September 2012 are omitted and the omission is not picked up until October 2016. A late claim for those periods cannot be treated as an amendment to the claim made on 17 March 2016 and those periods are out-of-time.
  • It is important to note that the fact that two claims arise out of the same judgment of the courts does not, of itself, mean that they should be treated as two elements of the same claim. For example, the judgment of the European Court of Justice (ECJ) in London Zoo gave rise to claims from zoos, museums, theatres, galleries, etc. The judgment of the ECJ in Linneweber caused claims to be brought in relation to mechanised cash bingo, mainstage bingo, gaming machines, grabbers, pushers, etc. The ECJ’s judgment in Elida Gibbs led to claims being made in relation to demo cars, courtesy cars, fleet cars, white goods, etc.

To the extent that the different consequences of judgments such as these are claimed separately, they must each be treated as the subject of discrete and separate claims. Put another way, any item that did not fall within the contemplation of the earlier claim (as described in the terms of the claim as submitted) that is claimed later, is a new and discrete claim, whether or not the claimant intends that it should amend an earlier claim.

It is worth bearing in mind the difference between the two claims at issue in the judgments Reed Employment. The 2002 claim was for output tax over-declared on supplies of staff to exempt and partially exempt customers. The 2009 claim was for output tax over-declared on supplies of staff made to taxable customers. The First-tier and Upper Tribunals held that the 2009 claim was not within the contemplation of the 2002 claim – it was not an amendment to the earlier claim.

Amendment to an existing claim

Arithmetic

An arithmetical or mathematical correction of a claim, for example because a decimal point was put in the wrong place or because the person calculating the claim divided instead of multiplying, should be treated as an amendment to it.

Transposition

Similarly the correction of a transposition error should be treated as an amendment to a claim.

For example, Jack manufactures and sells various types of widgets some of which are eligible for zero-rating. He mistakenly charges and accounts for VAT on one line of widgets at the standard rate. When he discovers his mistake, he makes a claim for £25,000. However, his book-keeper had copied the numbers wrongly when he wrote the claim letter and the claim should have been for £52,000. Being an error of transposition, when Jack comes back to us to correct this mistake, we accept that he is simply amending his earlier claim.

But not a new subject

Continuing the example above, Jack also repairs widgets some of which are eligible for zero-rating. He had carried out qualifying repairs to some of the widgets referred to above.

When he brought the £52,000 claim, his focus was entirely on the VAT over-declared on the sale of the widgets. The VAT over-declared on the repairs never crossed his mind. When he finally brings his claim for this VAT, it cannot be said to constitute an amendment to the first claim and must be treated as a new claim.