UK: VAT Refund Claims Denied by FACEVET Procedures
Wednesday June 2, 2010
8th and 13th Directive Procedures
The VAT tribunal have recently heard a test case concerning the rejection of VAT refund claims submitted to HMRC in the UK and processed under HMRC’s FACEVET procedures (the procedure used for overseas refund claims).
The 8th and 13th Directives impose conditions on making claims. For example, the claimant must submit a certificate of tax status and invoice evidence to support the claim.
When FACEVET was introduced HMRC announced that it would return claims that were incomplete. The claim had to be resubmitted within the strict time limits to be considered. For 8th Directive claims the time limit is 30th June of the year following that of the claim (e.g., 30th June 2009 for input tax incurred in 2008).
The test cases had similar issues. The claims were submitted very close to the deadline (26th June in one case and 28th June in another) and were all incomplete in one way or another (e.g., no certificate of status).
The main issue before the tribunal was whether the requirement for claims to be complete in every way by the due date was incompatible with EU law. (Before the introduction of FACEVET HMRC had allowed some flexibility). The tribunal decided that the FACEVET system did not impose onerous requirements. The requirements were laid down by the Directives.
The system for making 8th Directive claims has now changed to an electronic system and in principle offers more leeway. But there are still lessons to be learnt from this case. Most important is not to wait to the last minute to make the claim. The earlier the claims are made the sooner the taxpayer receives the refund.
Many taxpayers do not bother claiming under the 8th and 13th Directives because they feel the process is complicated and difficult. Accordance has a great deal of experience in making these claims on behalf of clients and is happy to help.