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HMRC internal manual

VAT Refunds

Unjust enrichment: Reimbursement: Explanatory notes to be issued to claimants

The reimbursement scheme (the “scheme”) only applies where you accept that by receiving a refund of sums overpaid or overstated as VAT your business would be unjustly enriched at your customers’ expense. 

This is because your customers had for practical purposes paid the VAT charged in error and by not passing the refund back to them your business would benefit as a result.

In such cases a refund of overpaid VAT will only be made if you agree to reimburse those customers in accordance with the terms of the “scheme”.

The scheme can be used by all business currently registered for VAT who wish to refund to their past customers any money they overpaid as VAT. The scheme can also be used by those businesses which are no longer registered for VAT; they are subject to the same terms and conditions as VAT registered businesses.