CH146430 | Interest: repayment interest: special provisions for VAT: Period for which an amount of VAT credit carries interest where there are other outstanding VAT returns

You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.

Before repayment interest is paid on an amount of VAT credit HMRC needs to ensure that the interest that is paid reflects the person’s VAT position as a whole. Where there are other VAT returns that have not been received and the due dates for those returns have passed, HMRC cannot be sure that they have the complete debt picture.

Therefore, a special provision applies to ensure that repayment interest is not paid on an amount of VAT credit for any period during which there are other VAT returns outstanding which were required to be made on or before the date on which the relevant repayment return was made.

Repayment interest will only be paid when all the outstanding returns have been received and the repayment interest start date will be the date the last outstanding return was received.

This special provision only applies to VAT credits. It does not apply where HMRC is repaying an amount that has been paid to HMRC.

See example at CH146440

FA09/SCH54/PARA12E(1)(a)