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07 July 2009 / John Hiddleston
Issue: 4213 / Categories: Comment & Analysis , VAT
JOHN HIDDLESTON urges practitioners to heed the health warning on direct taxation of VAT repayments


  • Are VAT repayments to companies liable to corporation tax?
  • Where is the legal authority for HMRC’s view?
  • Tax treatment of unclaimed balances.
  • Each case is different.

A number of European Court of Justice judgments in recent years have resulted in substantial repayments by way of overpaid VAT.

Revenue & Customs Brief 14/09 sets out HMRC’s view of the status for corporation tax purposes of certain kinds of repayments of VAT.

Perhaps wisely the authors of the brief say that they do not intend to provide a definitive technical analysis of the treatment for direct tax purposes of amounts repaid in the real world as circumstances will differ from case to case.

In general however HMRC’s view is that they do not agree with those who contend as a matter of legal...

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