22 October 2019 
Andrea Marshall, Tax Specialist
Martin Scammell has recently updated his 'VAT on Construction, Land & Property' book with the following information about which party is able to make a claim for overpaid or underclaimed VAT under section 80, in circumstances where the supplier has overcharged VAT, and has kindly given me permission to reproduce it here:
“It is now firmly established that a customer who has overpaid VAT to a supplier has a claim against HMRC if the VAT cannot be refunded by the supplier, in particular if the supplier is insolvent...." [Martin's book then notes some relevant cases.} "...HMRC, however, have been reluctant to accept the clear guidance from the ECJ on the matter, insisting that claims can only be pursued through the Courts. They said as much in Revenue & Customs Briefs 15/13 and 4 (2017) about one of these cases, Investment Trust Companies.
Change of stance in 2019
Following lobbying, however, HMRC indicated in August 2019 that:
‘A third party or customer who has overpaid VAT should reclaim that from their supplier. This is a commercial matter between the two parties. The supplier can make a claim to HMRC under s80 VATA 1994 as appropriate. Exceptionally, that is where it is impossible or excessively difficult for the customer to reclaim from the supplier, they may do so direct from HMRC. HMRC will now consider claims submitted direct, without a formal court claim.
Anybody who thinks they are entitled to make such a claim should contact HMRC setting out the full circumstances and why that entitlement arises. HMRC’s view is that a claimant should be in a similar position to somebody making a s80 claim. Where a claim is rejected the claimant’s recourse would be a Court claim, as per Revenue and Customs Brief 04/2017.
HMRC will publish guidance reflecting its view of the position in due course.’”
