VAT repayments ― overstated or overpaid output tax

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of when a business may expect a refund or credit from HMRC in respect of overpaid or overstated output tax.

What is overstated or overpaid VAT?

HMRC is obliged to credit a business for an amount of overstated VAT in the following circumstances:

1)
a business has accounted for VAT to HMRC in a prescribed accounting period and has incorrectly accounted for an amount of output tax which was not actually due to HMRC
2)
HMRC has assessed the business for a prescribed accounting period and has accounted for an amount of output tax which was not actually due to HMRC

VATA 1994, s 80(1), (1A)

If the business has overpaid VAT to HMRC (ie because the tax liability has been accounted for twice or allowable input tax

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