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HMRC internal manual

VAT Refunds

Unjust enrichment: How Section 80 and the unjust enrichment defence works in practice: Example 4

Output tax overdeclared £10,000
Associated input tax credit wrongly claimed £0,000
Debt-on-file £10,000
Net overdeclaration -£0,000
Total credit (£10,000)
Amount to be reimbursed to customers £10,000




In the above example, where unjust enrichment does apply and the business chooses to enter into the reimbursement arrangements they will be credited with £10,000 which will be set off against the outstanding debt-on-file of £10,000. The extent of their unjust enrichment is the gross amount of the overdeclared output tax (£10,000).


The claimant is required to reimburse the entire £10,000 notwithstanding the fact that he has not actually received any money from us.

If he fails to reimburse the money, either in whole or in part, we should make an assessment under section 80B of the VAT Act 1994 to recover however much has not been reimbursed, up to the full £10,000.