Commentary

V5.159B Refunds/credit in respect of overdeclarations of VAT

Part V5 Compliance, enforcement and appeals

V5.159B Refunds/credit in respect of overdeclarations of VAT

V5.159B Refunds/credit in respect of overdeclarations of VAT

VAT overdeclarations not exceeding £50,000

Where such an overdeclaration1 is corrected by means of an adjustment to the VAT account as described in V5.159 above, it follows that any adjustment to the amount due to or from HMRC will be reflected in the corrected figures in the VAT return for the period in which the disclosure is made, and consequently in the related payment to, or repayment from, HMRC.

VAT overdeclarations exceeding £50,000

EU case law

A number of cases have come before the Court of Justice of the European Communities concerning refunds of national charges which have been levied in breach of EU law2. The following principles are derived from these cases in so far as they appear relevant to UK legislation:

  1.  

    •     in the absence of EU rules, repayment must be made in accordance with national law

  2.  

    •     EU law does not require member states to repay charges which would involve an unjust enrichment of the person entitled to repayment

  3.  

    •     EU law does not prevent member states from taking into account, in considering unjust enrichment, whether the claimant has passed on the charges to other traders, or to consumers

  4.  

    •     any requirement of proof imposed by member states must not make it excessively difficult for claimants to secure repayment, and

  5.  

    •     whilst a limitation of the period in respect of which repayment may be made is not incompatible with EU law, it must be reasonable and, where the period is reduced,

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