Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Refunds

Unjust enrichment: Some items to consider: Factors not supporting the unjust enrichment defence

If some or all of the following factors are present it will probably be difficult to invoke successfully the unjust enrichment defence

  • Customers are not VAT registered
  • Customers are mainly private consumers
  • The industry or market sector is not particularly competitive (possibly containing only a few large businesses)
  • One or only a few of many businesses in a competitive industry overstated VAT
  • The overtaxed product is price elastic (potential buyers tend to be sensitive to price rises)
  • No change was made to prices when VAT was introduced
  • The product has many close substitutes
  • The incorrect VAT treatment has been of only short duration.

If all of the above elements are observed in a claim it is unlikely we shall be able to invoke successfully the unjust enrichment defence.