A four year limitation period applies when it comes to taxable persons submitting a claim for the repayment of overpaid VAT.

This limit was addressed in a case where the Appellant, The Holloways, a band & partnership for VAT purposes were assessed by HMRC for £7875.00. 

Due to the band spending much of their time touring around or outside the UK, they employed an accountant to ensure compliance with their VAT issues, including submitting VAT returns on their behalf.

Several VAT return deadlines were missed during 2008 and following the failure to submit a VAT return for the period ending 02-2009, HMRC issued an estimated assessment for the period. 

The accountant had communicated to the Appellant that all VAT returns had been submitted at the appropriate times however on HMRC writing to a member of the band in 2011, he discovered that this was not the case and asked the accountant to calculate the bands VAT liability for the relevant period.

The amount calculated stood at approximately £9000.00, however, the band were only able to pay approximately £8000.00, which they paid promptly. 

When the Appellant's accountant submitted the outstanding return in June 2013, the actual VAT liability payable to HMRC stood at £893.20. However, when a claim was made for the amount overpaid of £7000.00 (approx.) that same month HMRC stated that they were unable to credit the overpayment due to the claim being submitted more than 4 years after the end of the accounting period in which they assessment was made. 

The Tribunal rejected the appeal by the taxpayer. The rejection of this appeal demonstrates how stringently HMRC adhere to these time limits and so if a repayment is due, it is key to establish the details involved at the earliest possible opportunity.

For any queries with issues such as this, contact our free VAT helpline.