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This is direct tax guidance; for indirect tax guidance, refer to VAT Guidance.

You may come across a number of different types of refund of a sum paid as VAT.

will help you identify the appropriate guidance for the more commonly encountered scenarios.

»Ê¹ÚÌåÓýapp flowchart does not cover capital allowances or capital gains questions.

Terms used

Space is limited in the flowchart so:

‘Received by� is used in the flowchart to mean ‘received by and recognised in the accounts in accordance with GAAP�.

‘PCR� is used in the flowchart to mean post cessation receipt.

You may find it easier to follow the flowchart in this format.

Question 1

Refund received by original trader?

• Yes - Go to Question 2.

  No - Go to Question 3.

Question 2

Trader continues to trade?

• Yes - Taxable as a trade receipt: BIM40170.
• No - Taxable as a PCR: BIM40170.

Question 3

Received by successor?

• Yes - Go to Question 4.
• No - Go to Question 5.

Question 4

Successor continues to trade?

• Yes - Taxable as a trade receipt: BIM40170.
• No - Taxable as a PCR: BIM40170.

Question 5

Received for providing services?

• Yes - Go to Question 6.
• No - Go to Question 7.

​​​​​​​Question 6

Receipt of management services trade?

• Yes - Taxable in full as a trade receipt: BIM40178.
• No - Received because of right to claim: taxable as miscellaneous income: BIM40182.

Question 7

Received as a receipt from a trade that has ceased?

• Yes - Taxable as a PCR: BIM40180.
• No - Received because of right to claim: taxable as miscellaneous income: BIM40182.