Finance Act 2021

3 (1) Schedule 54 (repayment interest) is amended as follows.

(2) In Part 2, after paragraph 12B insert—

“VAT payments on account

12C (1) This paragraph applies in the case of a repayment of the amount by which—

(a) the total amount of payments on account made in respect of a prescribed accounting period, exceeds

(b) the amount of VAT payable in respect of that accounting period.

(2) The repayment interest start date is the date on which the VAT return for the prescribed accounting period is due.

(3) In this paragraph—

• “payment on account” means a payment on account required under section 28 of VATA 1994;

• “prescribed accounting period” has the same meaning as in VATA 1994;

• “VAT return” means a return required to be made by regulations under VATA 1994.”

(3) After Part 2 insert—

“PART 2A VAT: special provision as to period for which amount carries interest

12D In this Part of this Schedule—

• “prescribed accounting period” has the same meaning as in VATA 1994;

• “relevant VAT return” means the VAT return for the prescribed accounting period to which the VAT credit relates;

• “VAT credit” has the same meaning as in VATA 1994;

• “VAT return” means a return required to be made by regulations under VATA 1994.

12E (1) An amount of VAT credit does not carry interest for any period during which—

(a) a VAT return required to be made on or before the date on which the relevant VAT return is made has not been made, or

(b) there is a failure to comply with a requirement imposed under paragraph 4(1) or (1A) of Schedule 11 to VATA 1994 (production of evidence and giving of security).

(2) The period referred to in sub-paragraph (1)(b)—

(a) begins on the date when written notice requiring production of evidence or the giving of security is given by HMRC, and

(b) ends on the date when HMRC receive the required evidence or the required security.”