A recent case illustrates the sort of consequences that can arise from failing to take sufficient care over details when completing a claim for overpaid tax.

The claim was made by a group of companies for repayment of VAT wrongly paid. It failed, however, because of the strict operation of provisions in VAT law designed to make accounting for VAT easier for groups of companies.

Such groups typically trade amongst each other and so VAT law contains provisions which allow one member of the group to be the ‘representative member’ and to deal with HM Revenue and Customs (HMRC) on behalf of the group as a whole.

The issue was simple. The company that paid the VAT wrongly was not the representative member of the group for VAT purposes, so when it submitted its claim for repayment, it was rejected by HMRC on the ground that it was not entitled to receive it: only the representative member was competent to make the claim.

The decision was backed by the First-tier Tribunal and, on appeal, by the Upper Tribunal.