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HMRC internal manual

VAT Refunds

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HM Revenue & Customs
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VAT refund claims appeals: Leaving claims open

In its decision in University of Liverpool (VAT Tribunal decision 16769); [2001] BVC 2088, the VAT & Duties Tribunal described a completed claim as:

“… a claim which:

(a) has been met in full by the Commissioners; 

(b) has been met in part by the Commissioners and the time limit for appealing against the rejection of the remainder prescribed by rule 4(1) of the VAT Tribunals Rules 1986, as amended, has expired; 

(c) has been met in part by the Commissioners, the taxpayer has appealed against the rejection of the remainder, his appeal has been determined either by the tribunal or a court and the time limit prescribed for appealing against that determination has expired or the appeal has been compromised; 

(d) has been rejected in full by the Commissioners and the time limit for appealing against that rejection prescribed by rule 4(1) of the VAT Tribunals Rules 1986, as amended, has expired;(e) has been rejected in full by the Commissioners, the taxpayer has appealed against that rejection, his appeal has been determined either by the tribunal or a court and the time limit prescribed for appealing against that determination has expired, or the appeal has been compromised."

Thus any claim that follows a completed claim is a new claim. This is important where the follow-up claim is made out-of-time.

A claim is defined by the issue upon which it is based so that a claim for output tax overdeclared on X-Type Widgets and a claim for output tax overdeclared on E-Type Widgets are separate claims.

For example, if Able Ltd makes a claim on 23 April 2012 for output tax overdeclared on X-Type Widgets going back to the accounting period ending on 30 June 2008 and on 24 October makes a further claim for output tax overdeclared on the sale of E-Type Widgets, that ‘E-Type’ claim can only go back as far as the accounting period ending on 31 December 2008 - assuming that the claimant is on stagger 1.

It is clear from the parameters set out by the Tribunal above that unless the claim is paid in full or until an appealable decision is given by HMRC, the claim remains open.

Whenever a claim is refused, either in whole or in part, you must ensure that

  • the claimant is told in writing that the claim has been refused;
  • the letter explains why the claim is being refused;
  • the claimant is told of his right to ask for a review of the decision and of his right to appeal to the Tax Tribunal (under section 83(c) or (t)); and
  • the claimant is told that he has 30 days from the date of the letter in which to lodge his appeal.

You should not invite further discussion in a decision letter (see the decision of the VAT & Duties Tribunal in John Martin Group (VAT Tribunal Decision 19257); [2006] BVC 2045).