CRS VAT Consulting has been working through a number of policy and technical issues with HMRC following submission of the Fleming VAT claims, with a view to getting these approved. Although HMRC are yet to pay out any of these claims to the NHS, they aim to settle all claims by the end of 2011. Furthermore, HMRC are hoping to settle a good proportion of the NHS claims by the end of the 2009/10 financial year, provided the issues have been resolved.
Points being considered include:
- Entitlement to claims – some Trusts and SHAs have sent in duplicates for the same periods as it has been suggested (incorrectly in our view) that the SHAs are entitled to make claims and not Trusts This is being considered by HMRC’s legal advisers.
- Dates from which retrospective ‘extrapolation’ has been started and method of extrapolation.
- The ‘quantum’ of claims including areas covered, realistic extrapolation methods, output tax liabilities, etc.
- Interest – HMRC are generally committed to paying ‘simple’ interest, however there is a strong case to argue that this should be paid ‘compound’. We are aware that some private sector Fleming claimants have already been paid compound interest.
- Lennartz – the whole policy of Lennartz and its retrospective treatment is being considered by HMRC policy and legal teams.
HMRC received a total of £260m Fleming VAT claims from the NHS; 25% of this value (£66m) was submitted by CRS VAT Consulting. HMRC have acknowledged that CRS VAT Consulting has taken a leading role in ensuring that the standard of claims submitted is technically robust. Specifically, we have been told that CRS VAT Consulting has ‘put in a lot more work than many’ in making sure the claims submitted stand up to scrutiny. We are therefore confident that a good proportion of our client’s claims will be paid in the earlier timeframe.