“Three year cap” – transitional period
HMRC have announced the introduction of a transitional period for businesses to make recoveries of VAT previously underclaimed or overpaid in the period from 1 April 1973 to 1 May 1997. This follows years of litigation in this area culminating in HMRC’s resounding defeat in the House of Lords in the co-joined cases of Fleming and Conde Nast. This is an important development and effectively means that businesses now have the opportunity to revisit their historic VAT position and submit claims for any VAT they may be due. Claims must be submitted by 31 March 2009 and clients are advised to take immediate action to establish whether a claim is possible as, due to the timescales involved, it will undoubtedly take time to collate any claims before submission.
