V5.111 Payments by HMRC in respect of VAT credits
VAT return showing payment due to trader
Where a return shows that input tax for the period exceeds output tax (if any), the excess will be repaid1. This general principle is subject to a number of qualifications.
Tax less than £1
Where the tax repayable at the end of a prescribed accounting period is less than £1, it is treated as nil2.
VAT return(s) outstanding
HMRC is empowered to withhold payment if a VAT return for a prior period is outstanding3.
Failure to produce evidence
HMRC may require a person to produce such evidence as may have been supplied to him in relation to input tax as a condition of repaying the amount claimed4, and may thus withhold repayment if the evidence is not produced.
Failure to provide security
HMRC may, if it considers it necessary for the protection of the revenue, require a person to give such security for the payment of any VAT credit claimed as it considers appropriate as a condition of repaying that amount5. It may thus withhold repayment if the required security is not forthcoming. A taxpayer may appeal against such a requirement6.
HMRC may offset any payment due to a person under these provisions against any sum for which he is liable by way of tax, penalty, interest or surcharge, and the obligations of both parties are discharged where they do so7. For HMRC's right to set off, see V5.172.
Failure to make a claim in accordance with regulations
It is a condition of input
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