Value Added Tax Act 1994 Schedule 13 paragraph 21

Set-off of credits

Schedule 13 paragraph 21 deals with transitional rules for how HMRC may set off VAT credit amounts that became due before 10th May 1994.

• Section 81 of the VAT Act 1994 governs how HMRC handles credits owed to taxpayers and the set-off of those credits against other tax debts.
• For amounts that became due before 10th May 1994, Section 81 applies but without subsections (4) and (5).
• Subsections (4) and (5) of Section 81, which deal with additional set-off and interest provisions, are disapplied for these earlier amounts.
• This is a transitional provision ensuring that the expanded set-off rules introduced from 10th May 1994 onwards do not apply retrospectively to amounts already due before that date.