Revenue and Customs Brief 4/2022 announces that third-party claims directly against HMRC for refunds of VAT overpaid to a supplier can no longer be made from 1 January 2021, following the UK’s departure from the EU.
Under VATA 1994 s 80, only those who accounted for VAT on their VAT return can recover overpaid VAT from HMRC. Where a customer has overpaid VAT to its supplier, this is a commercial matter between the two parties. The customer’s remedy is to make a claim against that supplier. The supplier may then make a claim to HMRC and reimburse the customer.
In Investment Trust Companies [2017] STC 985, the Supreme Court acknowledged that under general principles of EU law, where it was impossible or excessively difficult for a customer to obtain reimbursement from the supplier, the customer may have been able to bring a claim against HMRC. Brief 4/2017 made clear that the circumstances in which a third-party customer could make such a claim directly against HMRC were extremely limited.
Brief 4/2022 now confirms that, with effect from 1 January 2021 there is no longer any right of action based on a failure to comply with any of the general principles of EU law. This includes the right to bring a claim in the exceptional circumstances identified in Investment Trust Companies.
Revenue and Customs Brief 4/2022 announces that third-party claims directly against HMRC for refunds of VAT overpaid to a supplier can no longer be made from 1 January 2021, following the UK’s departure from the EU.
Under VATA 1994 s 80, only those who accounted for VAT on their VAT return can recover overpaid VAT from HMRC. Where a customer has overpaid VAT to its supplier, this is a commercial matter between the two parties. The customer’s remedy is to make a claim against that supplier. The supplier may then make a claim to HMRC and reimburse the customer.
In Investment Trust Companies [2017] STC 985, the Supreme Court acknowledged that under general principles of EU law, where it was impossible or excessively difficult for a customer to obtain reimbursement from the supplier, the customer may have been able to bring a claim against HMRC. Brief 4/2017 made clear that the circumstances in which a third-party customer could make such a claim directly against HMRC were extremely limited.
Brief 4/2022 now confirms that, with effect from 1 January 2021 there is no longer any right of action based on a failure to comply with any of the general principles of EU law. This includes the right to bring a claim in the exceptional circumstances identified in Investment Trust Companies.
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