On 10 July 2013, HMRC published Revenue & Customs Brief 15/13 in which it sets out its view of the circumstances in which, and the procedure whereby, taxpayers who have been charged, and borne the economic cost of VAT that, under EU law, was not due and who, in exceptional circumstances, have been unable to recover the VAT from their suppliers, may make a claim for reimbursement by HMRC. This follows the decision of the High Court in Investment Trust Companies (in liquidation) v HMRC3 (ITC).

The Brief makes it clear that mistake-based claims in restitution in England, Wales and Northern Ireland, must be brought through the High Court (the County Court for claims under £30,000). No purported claims should be sent to HMRC. Claims will be considered only if:

  • The VAT was mischarged in breach of EU law, not simply in breach of UK legislation. 
  • It is impossible or excessively difficult in practice for the claimant to claim repayment from the supplier.
  • The supplier has submitted a valid claim for refund of the VAT under section 80 of the Value Added Tax Act 1994 or is still within the time limits for doing so.

It would appear that HMRC is appealing against the decision in ITC, as the Brief states that claims will generally be stayed or listed behind the litigation in ITC. All claims that are made must be particularised and must be made within six years of the date on which the VAT was charged, or the date on which the taxpayer became aware that the VAT had been charged, in error.

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