Value Added Tax Act 1994 section 78 / Schedule 9ZE paragraph 24

Interest in certain cases of official error

Paragraph 24 of Schedule 9ZE ensures that where HMRC makes an error causing a person to overpay UK VAT under a special VAT scheme, the person is entitled to interest on the amount owed back to them, in the same way as under the main interest provisions of section 78.

• Where HMRC's error causes a person to account for or pay UK VAT under a special scheme that was not actually due, HMRC must repay the amount and pay interest on it.
• The existing interest provisions in section 78 (interest in cases of official error) are extended to cover overpayments arising under special VAT schemes.
• References to VAT returns within the interest rules are read as references to returns required under a special VAT scheme, rather than standard VAT returns.
• The term "output tax" is given a broader meaning for these purposes, applying to any person rather than only to a taxable person.