reclaim VAT early?

by **bruboy** on Tue Aug 31, 2010 2:21 pm

We're about to purchase a business premises on which there is around £200k VAT to pay.

Our current VAT quarter doesn't end for a few months - is it possible to ask for a refund early or do we just have to wait until we file our next return to get the £200k back? [I'm guessing this is the answer

]

Thanks

Alastair

by **Generix** on Tue Aug 31, 2010 2:42 pm

bruboy wrote:We're about to purchase a business premises on which there is around £200k VAT to pay.

Our current VAT quarter doesn't end for a few months - is it possible to ask for a refund early or do we just have to wait until we file our next return to get the £200k back? [I'm guessing this is the answer ]

Thanks

Alastair

If you are fully taxable you can request a set off (need sellers agreement) with HMRC - although unless there are exceptional circumsances (cashflow hardship etc) then they are unlikely to grant this.

Else come to some agreement with the seller re payment of VAT or manipulating tax point.

by **section 44** on Thu Sep 02, 2010 10:27 am

Is there anything in the law or HMRC's manuals/guidance to support set-off?

by **Generix** on Thu Sep 02, 2010 12:58 pm

section 44 wrote:Is there anything in the law or HMRC's manuals/guidance to support set-off?

I'm not sure on the technical position of set-offs other than they are pretty much given in exceptional circumstances. Perhaps VATA94 s81 gives the vires? If you would like I can dig out the paperwork for the work I did on this and try and find what I based the request on.

fyi: In any case I have only been granted it a few times for a major hotel group I did some VAT work for when they were reorganising the properties within their group structure and in each case the issue was that the VAT reg was pending (HMRC taking ages to get the VAT registration approved) for the buyer (newco related company within hotel group structure) and as a result the group was having to fund the output VAT on these transfers (significant amounts of VAT to say the least).

So I wrote to HMRC requesting set off of the amounts and in some of the cases they were granted.

(Where they were not granted I got my own back in the phase 2 & 3 stages by getting newcos set up with a VAT stagger ahead of the seller co's VAT stagger and obtaining a cash flow benefit) :twisted:

by **bruboy** on Mon Sep 06, 2010 6:42 pm

Thanks very much for the replies.

Looks like we'll just have to suck it up then

The tax man wins this round...

Alastair

by **cliffordpope** on Fri Sep 17, 2010 3:30 pm

If you talk nicely to your local VATman you may be able to get him to speed up processing of your quarterly returns.
Ours gave us the tip that if we merely waited in the usual way, any unusually large repayment would be queried by the payments section and then investigated before payment was authorised. Our local man helpfully said that if we sent him a copy of the large invoices as soon as possible, he could short-circuit that investigation.