Value Added Tax Act 1994 section 78 / Schedule 9ZD paragraph 30

Interest in certain cases of official error

Section 78 / Schedule 9ZD paragraph 30 provides for the payment of interest to persons who have overpaid UK VAT as a result of an error made by HMRC, where the VAT was accounted for or paid through a non-UK scheme or under Schedule 9ZD.

• Where HMRC makes an error that causes a person to overpay UK VAT through a non-UK scheme or under Schedule 9ZD, the interest provisions of section 78 apply to the amount HMRC must repay.
• Section 78 operates as though its qualifying condition is automatically satisfied for the affected person, so there is no additional threshold to meet before interest becomes payable.
• References to "a return" in section 78 are read as referring to a return under the relevant non-UK scheme (where the overpayment arose under that scheme) or a return under Schedule 9ZD (where the overpayment arose under that Schedule).
• For these purposes, "output tax" is given a broader meaning so that it applies to any person who has accounted for or paid the VAT, not only to persons who are formally registered as taxable persons.