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HMRC internal manual

VAT Repayment Supplement Manual

HM Revenue & Customs
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Principles of repayment supplement: ex-gratia payments

If exceptionally a taxpayer contends that the amount of repayment supplement is insufficient to compensate for the length of delay by HMRC, he can apply for an additional ex-gratia payment through the complaints procedure. Statutory interest under section 78 VATA is not appropriate in these circumstances because it is specifically excluded by subsection (2). Only if repayment supplement is not due can consideration be given to any claim for statutory interest.

There is strict criteria to qualify for an ex-gratia payment, it is not an automatic entitlement, so simply saying the amount should be topped up because the repayment supplement is inadequate is not enough, evidence of what the money would have earned had it been invested elsewhere may be required. Guidance is contained in the Complaints and Remedy Guidance (CRG) manual (financial redress – unreasonable delay) and policy responsibility lies with Central Customer and Strategy.