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HMRC internal manual

VAT Repayment Supplement Manual

Time allowed for enquiries, correcting errors and amending details

The law – S79(4) and S79(3) VATA 1994

HMRC has 30 calendar days to issue the written instruction to make a repayment or refund but we don’t count the time we take to make reasonable enquiries to verify the repayment return or claim, to correct errors or omissions, or to amend trader details.

What is reasonable enquiry time?

We do not count reasonable time we need to enquire into the return or claim. Enquiry time

  • begins when we first make contact with the trader,
  • includes weekends and public holidays, and
  • ends when we are satisfied that we have received a complete answer to the enquiry.

For enquiry time to be reasonable, we must work the enquiry efficiently and you should take steps to make sure that there are no delays on HMRC’s part. VATRS10300 and VATRS10400 give more detailed guidance but in general terms you should follow these rules below.

First contact

You should make your enquiry quickly, state clearly what your enquiry is and spell out what information you need to see. This first contact begins the enquiry time and therefore the repayment supplement clock is stopped

  • if you are writing to the trader, 2 working days after sending your letter (this allows for the time it takes for the trader to receive your letter)
  • if you are telephoning or emailing the trader
    • the day of your call or email if you make it before 5pm that day
    • the day after your call or email if you make it after 5pm that day.

Making a telephone call where you do not manage to speak to the authorised person (for example, the sole proprietor, partner or director) does not count as first contact.

Irrespective of whether you make initial contact by telephone, letter or a visit you must advise the trader that their repayment will not be authorised until you have fully verified it. It is important to do so in the event the trader appeals against the refusal to pay repayment supplement.

You must specify the action you intend to take in relation to the return or claim and set a timetable (14 days maximum) for the trader to provide the specific information you need.

Visits

If a visit is needed to verify the return or claim

  • in your first contact, you must explain the reason for the enquiry and the list of information you need to see in your first contact
  • the visit should take place as quickly as possible after first contact. It is reasonable to expect that this should be within 7 days where a shortage of visiting staff or heavy workloads, for example, mean that a visit cannot be cannot be carried out within 7 days from the point of first contact; this will be considered HMRC delay. In these circumstances, the days after day 7 are not reasonable enquiry time and the repayment supplement clock should be re-started on the day the visit is booked and not stopped until the date the visit takes place
  • where a trader requests a later date for a visit after first contact, this time is not HMRC delay
  • where a trader cancels the visit and asks for it to be rescheduled, this time is not HMRC delay.

Reconsidering and following up

If you do not receive the necessary information by the target date, you must reconsider the case and make further contact with the trader within 2 working days of reconsidering.

Checking responses

You may take a reasonable amount of time to check responses received to your enquiries. You should examine the response promptly after receipt, and consider whether you can end your enquiry or whether you need to make further enquiries. Those enquiries are not limited to those put to the trader and may include

  • cross-checking the responses against our records or where appropriate those of other traders
  • seeking policy advice where necessary, but you should always make it clear in your request for advice that a repayment is pending approval.

Only active caseworker consideration of a response can count as days deductible as reasonable enquiry time. It is not reasonable to leave a case unworked.

If a trader provides only partial information in response to your enquiry, you should follow up for the missing information immediately.

You must keep a full record in EF of what action you have taken on the case on each day of the enquiry. This will support any decision whether or not repayment supplement is due.

The number of days deductible as reasonable enquiry time is keyed into the system when the enquiry has been completed. Any HMRC delay during the process cannot be included in the total number of days deductible.

What is reasonable time for correcting errors or omissions?

We do not need to count reasonable time taken to correct errors or omissions in the return or claim. An error here does not mean an error correction notification from the trader: it does mean a return that needs some sort of HMRC intervention before it can be fully processed, but not if the trader has done what we have told them to do and that has caused the rejection. An error return is one that the VAT mainframe is unable to accept

  • Where we do not need to contact the trader and we correct the error, the time needed depends on the nature of the error and how quickly we can resolve it. In practice, we allow 2 days that do not count.
  • Where we refer the return or claim back to the trader for correction, the time taken to resolve the error does not count, but you should follow the usual rules on enquiry time above for contacting the trader and following up. Once corrected by the trader, we allow 2 days to process this back onto the system.

In both scenarios, the 30 day clock stops when the error is first identified (the day after the receipt of the return) and restarts when the corrected return is re-input to the VAT mainframe.

The number of days deductible as correcting errors is keyed into the system when the error has been resolved. Any HMRC delay during the process cannot be included in the total number of days deductible.

What is reasonable time for amending trader details?

If, during the process of verifying a repayment return or claim, we receive notification of amendments to be made to the trader’s

  • address
  • bank account details, or
  • other registered particulars

the time we take to verify and make these amendments does not count towards the 30 day period. Although this is not included in section 79 VATA, HMRC has to take time out of the repayment process to make the amendments. Nevertheless such amendments should be made as quickly as possible and certainly within 14 days so as to avoid HMRC delay. The repayment supplement clock stops when the necessity for the amendments becomes known to HMRC and restarts when the amendment is made.

The number of days deductible as amending trader details is then updated to the system. HMRC delay during this process cannot be included in the total number of days deductible.