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JMW15
January 25, 2022
Question

Wrongly charged VAT on a new build

  • January 25, 2022
  • 1 reply
  • 0 views

I incorrectly charged VAT on a new build 2 years ago and the returns have been filed. The customer has now been in touch and HMRC will not allow them to reclaim the VAT as it should not have been applied to the invoice. They would like me to refund the VAT amount but how do I go about doing this in a way that ensures I get the amount back from HMRC.

1 reply

paul72
paul72
January 27, 2022

Hi @JMW15 

From an accounting point-of-view, the simplest way to do this would be to issue a credit note (with VAT) then re-invoice (zero rated) but I don't think that's how HMRC would want you to do it.

 

Strictly speaking, you need to hold evidence that it was in fact a new build.  If you didn't have this from the customer at the time then invoicing with VAT was the correct thing to have done.

 

Speak to someone from HMRC VAT section.  Ask the customer for their contact so that you're both speaking to the same person.

Ask their advice, step-by-step, and get it in writing before you do anything.  This will ensure that you don't get stung further down the line.

 

Hope this helps.

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