Value Added Tax Act 1994 section 85B

Payment of tax where there is a further appeal

Section 85B deals with what happens to VAT payments and repayments while a further appeal against a tribunal or court decision is ongoing, including provisions to protect the revenue and to prevent financial hardship.

• While a further appeal is pending, VAT must still be paid or repaid in line with the decision of the tribunal or court being appealed against
• If the further appeal changes the amount due, any overpayment is refunded (with possible interest), and any underpayment becomes due 30 days after HMRC issues a notice of the revised total
• HMRC or the relevant tribunal or court can withhold payments, require adequate security, or stay payment requirements to protect the revenue or where financial hardship would otherwise result
• These protective and hardship measures cease to apply once the further appeal has been finally determined