VRM12700 - What to do with claims resulting in unjust enrichment: who can use the reimbursement arrangements

In principle any person entitled to make a claim under section 80 can undertake to reimburse his customers using the reimbursement arrangements.

However, there are a few things that you need to be aware of.

Claimants who are no longer registered for VAT

We have no objection to a deregistered trader using the reimbursement arrangements where

• the business was registered for VAT for the whole of the period covered by the claim, and
• the business has the names and addresses of the consumers to be reimbursed.

Generally speaking, you should deal with deregistered claimants in the same way as claimants who are still registered for VAT when they make their claim. If there is any doubt whether a business can abide by the terms of the scheme the refund should not be made.

Claimant’s customers are registered for VAT

Where the claimant’s customers are themselves taxable persons who are entitled to deduct as input tax anything charged to them as output tax, we will not allow the claimant to reimburse those customers.

You should normally refuse claims made in these circumstances for unjust enrichment on the grounds that the VAT charge has been a burden neither to the supplier nor to the customer. Offers by the claimant to reimburse his customers should also be refused.