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HM Revenue and Customs Brief 7/16 - reminder of withdrawal of the VAT Misdirection


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Reminder of withdrawal of the VAT Misdirection Extra Statutory Concession 3.5 in cases of VAT liability change

Published 1 February 2016


This brief is issued as a reminder that the misdirection class concession no longer exists. It also gives notice that with effect from 1 August 2016 HM Revenue and Customs (HMRC) will no longer routinely consider requests not to pursue the tax due.


Revenue and Customs Brief 24/11 withdrew Business Brief 28/04 item 2 with effect from 1 August 2011. Business Brief 28/04 explained the then HM Customs and Excise (HMCE) policy regarding the correction of VAT accounting errors arising from a change in HMCE’s interpretation of VAT law.

Business Brief 28/04 contained now outdated references to what was known as “the misdirection class concession” and examples of the application of that concession. The brief stated that where a business chose to register for VAT belatedly in respect of supplies that had previously been treated as exempt but should have been treated as taxable, HMCE would not pursue tax under the misdirection class concession to the extent that it had not been passed on to the customers (net of input tax).


HMRC continues to receive registrations for VAT in which businesses specifically request HMRC not to pursue net tax due on supplies where VAT has not been passed on to customers.

From 1 August 2016 HMRC will no longer routinely consider requests not to pursue the tax due.

Any request not to pursue net VAT due, where VAT has not been charged on to customers, must be received by HMRC VAT registration service on or before 31 July 2016. HMRC will only consider requests that include complete and accurate calculations of both output tax not charged on and the associated input tax and where the VAT return (covering all supplies whether or not VAT has been charged on) has been submitted.

This applies to all customers regardless of whether they are, have been, or intend to apply to be registered for VAT.

Claims should be sent to:

Liable no Longer Liable Team
HM Revenues and Customs
Imperial House
77 Victoria Street
DN31 1DB

If your claim or registration relates to a specific Court decision, please make that clear on the application.

Further information

For current guidance on the principles to be applied in cases where a person believes that HMRC is bound by advice which it has given, please refer to the notice When you can rely on information or advice provided by HM Revenue & Customs (HMRC).

About the Author

© Crown Copyright 2016.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2016-02-02 07:29:15 in Tax Articles

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