Value Added Tax Act 1994 section 78A

Assessment for interest overpayments

Section 78A deals with the recovery of interest payments made by HMRC to persons who were not entitled to receive them, including the assessment process, time limits, and treatment of recovered amounts.

• Where HMRC has paid interest under section 78 to someone not entitled to it, they may assess the overpaid amount and notify that person
• The assessment must be made within two years of HMRC obtaining sufficient evidence to justify it
• Once assessed and notified, the overpaid interest becomes a debt treated as VAT due and is recoverable accordingly, unless the assessment is withdrawn or reduced
• Notifications sent to representatives such as personal representatives, trustees in bankruptcy, receivers, or liquidators are treated as notifications to the person they represent