Changes to VAT accounting: some clarification

We have written previously about the discussions between the Association of Property and Fixed Charge Receivers (NARA) and HMRC concerning the duty of LPA receivers to account for VAT and, in particular, whether it is permissible for LPA receivers to set off input VAT.

Following those discussions HMRC has updated Notice 700/56 (the Notice), sections 2 and 17 of which refer to LPA receivers. The Notice confirms the following principles: HMRC recognises that the receiver’s obligation to account for VAT is limited to accounting only for the net amount that would be due from the borrower. A receiver may therefore, in respect of the receivership property, set off input VAT in making payments to HMRC for VAT collected by the receiver; the VAT declaration should be made on Form VAT 833, which should be submitted along with the appropriate payment; payment may be made by bank transfer; previously payment had to be by cheque.

HMRC has not deviated from its position that refunds of input VAT cannot be made to a receiver, as they can be given to the taxpayer/borrower only…

Continue reading Changes to VAT accounting: some clarification | Briefings | The Lawyer.


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