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HMRC internal manual

VAT Refunds

HM Revenue & Customs
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Four year cap - other provisions: Regulation 111 - Operation of time limit: Post-deregistration input tax - Transitional provisions

The time limits in regulation 111(6) do not apply where a person

  • deregistered before 1 May 1997; and
  • incurred the input tax being claimed before that date.

For example, if a business deregistered on 1 June 1997 and incurred input tax on 1 July 1997, it has until 30 June 2000 to reclaim that money. If, on the other hand, the business deregistered on 1 February 1997 and incurred the input tax on 1 March 1997, there is no time limit on the claim.

This only applies to input tax incurred after the effective date of deregistration (EDD) on services relating to the business’ taxable business activities (i.e. activities carried out prior to the EDD). Such services might include, for example, solicitors’ or accountants’ services.

It is important that both the deregistration and supply took place before 1 May 1997 for the transitional provisions to have effect. This means that if someone deregistered on 1 February 1997 and incurred tax on 1 June 1997, they will only have until 31 May 2000 to reclaim the money.