The Value Added Tax Regulations 1995

Determination of outstanding amount of consideration in money

162.  —

(1) Where, before the debtor became insolvent—

(a) the claimant made more than one supply to the purchaser,

(b) such supplies were at differing rates of VAT (including the zero rate) or at least one supply was exempt, and

(c) part of the total amount of the consideration in money for such supplies was paid,

then, for the purpose of calculating any refund, the outstanding amount of the consideration in money for each supply upon which VAT was accounted for and paid shall be taken to be such part of the debt as is attributed to such supply in accordance with the rules set out in paragraph (3) below for attributing the debt to supplies (whether taxable or otherwise) referred to in that paragraph.

(2) In this regulation “the debt” means the amount of the consideration in money for supplies made to the purchaser and owed by the debtor when he became insolvent less, save as the Commissioners may otherwise allow, any amount owed by the claimant to the debtor at the time he became insolvent which—

(a) under the law governing the insolvency of the debtor can be set off, or

(b) cannot be so set off but in respect of which payment can be lawfully demanded of the claimant by the person with whom the claimant proves in the insolvency of the debtor and which is not so paid at the time the claimant makes his claim to the Commissioners.

(3) The debt shall be attributed to the supply which is most recent in time before the debtor became insolvent and, if not wholly attributed to that supply, thereafter to supplies in the reverse order to the date on which they were made, except that attribution shall not be made to any supply where the consideration in money for that supply was paid in full and the payment was allocated to that supply by the debtor at the time of payment, and where—

(a) the most recent supply and other supplies to which the whole of the debt could be attributed under this paragraph occur on one day, or

(b) the supplies to which the balance of the debt could be attributed under this paragraph occur on one day,

attribution shall be made to those supplies by dividing the consideration in money for each such supply upon which VAT was accounted for and paid by the total amount of the consideration in money for those supplies (whether taxable or otherwise) and multiplying by the debt or the balance of it as the case may be.