Value Added Tax Act 1994 section 79

Repayment supplement in respect of certain delayed payments or refunds

Section 79 provides for a supplement to be paid to taxpayers when HMRC is late in making VAT repayments or refunds, acting as compensation for the delay.

• Where HMRC fails to authorise a VAT repayment or refund within 30 days, the taxpayer receives a supplement of 5% of the amount due or £50, whichever is greater
• The supplement applies to VAT credit claims on returns, and also to refunds due to bodies covered by sections 33, 33A, 33B, and 33C (such as local authorities, museums and galleries, academies, and certain charities)
• To qualify, the return or claim must be submitted on time, and the amount claimed must not exceed the amount actually due by more than 5% of that amount or £250, whichever is greater
• The 30-day period is extended to exclude time spent by HMRC raising and answering reasonable enquiries, correcting errors, and (for payments) any period during which the taxpayer has outstanding returns