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HMRC internal manual

VAT Repayment Supplement Manual

HM Revenue & Customs
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Principles of repayment supplement: qualifying conditions

HMRC is liable to pay a taxpayer a repayment supplement (RS) when the qualifying conditions set out in section 79(2) VATA are met. The qualifying conditions are:

  • The return or section 33, 33A, 33B, 33C claim must have been received by the due date.
  • The written instruction directing the making of the payment or refund was not issued within the relevant period of 30 calendar days (see below).
  • The amount of any arithmetical error or mis-declaration discovered on the return does not reduce the net tax originally claimed by more than 5% or £250, whichever is the greater.

Section 79(2A) defines the relevant period as 30 days beginning with the later of the due date of the accounting period to which the return or claim relates and the date of receipt by HMRC. The 30 days are calendar days which therefore includes weekends and public holidays. However in computing the 30 days section 79(3) allows certain matters to be left out of account and there may be occasion when this refers to weekends or public holidays, but see VATRS04200 for more detail.

Section 79(3) VAT Act 1994 also states that any delay in making a payment while earlier returns remain outstanding is left out of the calculation of the 30-day period. The practical effect of this is that the calculation of the relevant period known as the RS clock will not begin until outstanding returns have been submitted. The RS clock, see VATRS04100, starts from the date we receive the last outstanding return and not the date it is updated to the VAT mainframe.