Revenue and Customs Brief 4 (2018): aligning time limits for VAT refund schemes
This brief sets out HMRC's policy on the changes to the time limits for VAT refund schemes if you're a local authority, fire authority, police or similar body.
1. Purpose of this brief
This brief is to notify you of a change in time limits for claiming VAT refunds from 1 July 2018, in accordance with Section 33 of the Value Added Tax Act 1994.
2. Who should read this
You should read this if you’re a local authority, fire, police authority or similar body that can make VAT refund claims for costs linked to your statutory obligations.
3. Background
Local authorities, fire authorities, the police and similar bodies perform statutory functions which are treated as outside the scope of VAT. Section 33 of the Value Added Tax Act 1994 allows you to claim refunds for associated VAT costs, for example on domestic refuse disposal or social care.
The time limit for such claims is being extended from 3 to 4 years, to align with normal VAT time limits. This change applies from 1 July 2018. No claim can be made for goods imported or acquired on goods or services supplied before 30 June 2015.
The time limit during which HMRC may seek adjustments relating to claims is also extended from 3 to 4 years.
There will be a transitional period to enable you to adjust to the new requirements and to ensure that accounting periods that are out of time on 30 June 2018 are not bought back in time by the change.
Between 30 June 2018 and 30 June 2019 the earliest accounting period for which an adjustment may be made is that ending on 30 May 2015.
By 31 July 2019, the 4-year time limit will have come fully into effect so that a claim for adjustment made on that date would go back to the period ending 30 June 2015.
4. Further information
For further information see Local authorities and similar bodies (Notice 749).