The Value Added Tax (Amendment) (No.3) Regulations 2014

Amendment of the Value Added Tax Regulations 1995

7.—(1) At the start of paragraph (1) of regulation 171 (bad debt relief: repayment of a refund) insert “Subject to regulation 171A,”.

(2) At the start of paragraph (2) of regulation 171 insert “Subject to regulation 171B,”.

(3) At the start of paragraph (3) of regulation 171 insert “Subject to regulation 171B and,”.

(4) After regulation 171 insert—

“Calculation of repayment where reduction in consideration: special accounting schemes

171A.   —In a case falling within sub-paragraph (b)(iii) of regulation 171(1) where the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, the amount to be repaid is such an amount as is equal to the amount by which the VAT chargeable on the relevant supply is reduced.

Timing and method of repayments: special accounting schemes

171B.— (1) Where—

(a) the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, and

(b) a repayment is required by regulation 171(1),

that repayment must be made no later than twenty days after the end of the tax period in which the payment for the relevant supply is received or the reduction in consideration is accounted for in the claimant’s business accounts.

(2) Where—

(a) the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, and

(b) a repayment is required by regulation 171(3),

that repayment must be made no later than twenty days after the end of the tax period in which the failure to comply first occurred.

(3) In either case the repayment must be made by—

(a) amending (in accordance with Article 61 of the Implementing Regulation) the relevant non-UK return or the relevant special scheme return for the tax period in which the VAT on the relevant supply was brought into account, or

(b) (where the period during which a person is entitled to make such an amendment has expired) sending the sum due to the Commissioners.”.