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HMRC internal manual

VAT Refunds

Unjust enrichment: Reimbursement: Administering the scheme

Once a business joins the scheme, it is their responsibility to make the refund.

Our only responsibility is to ensure that the business has met the terms of the undertaking. Under no circumstances should repayments be made direct to the business’s customers.

The scheme does not allow the business to retain any of the refund to cover costs, as this would defeat the purpose of the scheme (see the decision of the VAT & Duties Tribunal in Penelope Anne Cowdy (t/a Berriewood Farm) (VAT Tribunal Decision 18599) [2004] BVC 4094).

If an administration fee has been charged it can be recovered by assessment under section 80B of the VAT Act 1994.