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HMRC internal manual

VAT Refunds

Unjust enrichment: Some items to consider: Factors supporting the unjust enrichment defence

Some or all of the following factors must be present if unjust enrichment is to be successfully invoked

  • Customers are VAT registered
  • Customers are mainly business
  • The market in which the claimant is operating is competitive
  • All the players in the sector overstated VAT on the product in question
  • The product is price inelastic (it’s buyers are not normally price sensitive), this includes necessities and addictive goods
  • Prices are changed when VAT is introduced
  • The product has no close substitutes or very few
  • The incorrect VAT treatment has continued over a long period of time.

If all of the above elements are apparent in a claim it is very likely we will be able to invoke successfully the unjust enrichment defence.