VSIM6500 - For what period is statutory interest due: repayment claim contains something not entitled to

This guidance deals with interest matters in respect of prescribed accounting periods starting on or before 31 December 2022. Interest matters with effect from 01 January 2023 are dealt with under Finance Act 2009.

Please see Compliance Handbook page CH140000 onwards to find the new interest rules guidance.

Section 78 (8) VATA provides for any delay in the authorisation of the payment of statutory interest caused by the conduct of the taxpayer to be taken into account when determining the applicable period, see VSIM6200.

Section 78 (8A) VATA identifies the particular conduct of the taxpayer that should be considered, se VSIM6300.

Section 78 (8A) (c) VATA provides that when determining delay by the taxpayer for the purposes of section 78 (8), we can take into account where if in the making, or as part of, or in association with either the claim for statutory interest or the repayment claim on which statutory interest is claimed the taxpayer includes anything to which he is not entitled.

Section 78 (8A) (c) VATA applies where a claim is submitted but the taxpayer has included items which he is not entitled to claim. However it is not as straight forward as that because we need to be sure that the inclusion was a delaying tactic by the taxpayer and not a genuine error. This can only be determined by the response (if any) to a request for further information.

Section 78 (9) VATA supports section 78 (8A) in that it sets out the period ‘start and stop’ dates in relation to requests for further information, see VSIM6400.

VATA s 78 (8)

VATA S 78 (8A)

VATA s 78 (9)