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HMRC internal manual

VAT Refunds

Claims for overdeclared output tax: Definition of a claim: Burden of proof and verification

It is important to note that it is for the claimant to satisfy us that he has made the overdeclaration of output tax that he is claiming. It is not for us to show that he has not. The law provides that HMRC will be liable to credit an amount to a claimant where he:

“has accounted to the Commissioners for VAT … and has brought into account as output tax an amount that was not output tax due …”

The law does not provide that HMRC shall be liable where it appears to them that a person might have brought an amount into account as output tax. It provides that we shall be liable where he has brought an amount into account, etc. Furthermore, the reference to ‘an amount’ is equally important. It requires, in effect, that the amount is exact, specific and accurate.

The burden of proof is on the claimant.

Thus an unsupported assertion by the claimant or his representative that an amount has been overdeclared as output tax will not be enough to persuade HMRC to pay the claim. We shall want to see hard evidence to show that the overdeclaration was, in fact, made.

HMRC are entitled, when dealing with claims, to satisfy ourselves that the overdeclaration has been made and that the amount claimed is accurate and we are entitled to refuse to make any payment against the claim until we are so satisfied (see the judgment of the High Court in R (on the application of UK Tradecorp Ltd) -v- CCE [2004] EWHC 2515 (Admin); [2005] STC 138; [2005] BVC 128). This case related to a claim for input tax but the logic applies equally to any claim made against HMRC.

Under no circumstances should a claim be paid until

  • it has been established that the overdeclaration was, in fact, made, and
  • the amount of the claim has been verified.