Value Added Tax Act 1994 section 80

Credit for, or repayment of, overstated or overpaid VAT

Section 80 sets out the rules for claiming credit or repayment where VAT has been overstated or overpaid, including time limits for claims, the unjust enrichment defence, and HMRC's power to recover excess credits.

• Where a person has accounted for output tax that was not due, or HMRC has assessed output tax that was not due, HMRC must credit the person with that amount upon receipt of a valid claim
• Claims must be made within four years of the relevant date, which varies depending on whether the overpayment arose from a return, an assessment, an erroneous voluntary disclosure, or a direct payment of VAT not due
• HMRC may refuse a claim if crediting the amount would unjustly enrich the claimant, though where the taxpayer has suffered loss or damage from mistaken assumptions about how VAT rules operate, that loss may reduce the unjust enrichment defence up to a proven compensatory amount
• Where HMRC has credited an amount in excess of what was properly due on or after 26 May 2005, they may assess and recover the excess, provided the assessment is made within two years of the later of the end of the relevant accounting period or the date they obtained sufficient evidence to justify the assessment