Regrettably we also have not been provided the refund in a cash form from Landmark, and hence are not in a position to pass it to assessors. Please see the below as advice from our accountants:
“There is a great deal of misinformation and misunderstanding floating around, which is understandable because the VAT change which Landmark made is a complex technical tax issue. We can’t go into those technicalities but we can explain the consequences we all have to work with.
Let’s rehearse the facts so there is no confusion. Landmark decided that they had made a mistake by charging VAT on their fees. That VAT was of course collected by Landmark from its customers over the period and paid to HM Revenue & Customs through its VAT returns.
In discovering the mistake Landmark claimed back from HMRC the VAT they had overpaid over the years and this is limited by the four years rule in the VAT legislation.
Having reclaimed the VAT from Customs they needed to give it back to their customers who they had overcharged. Quidos claimed this refund and was issued with a credit note covering the 4 year period. This was not a cash refund from Landmark, just a credit note.
Having claimed back the VAT from Landmark, Quidos needed to give the credit to its customers. It therefore issued credit notes to all its customers. So for Quidos the exercise is neutral. The credit note in Landmarks cancels out the credit notes sent out to its customers.
A credit note can be used to offset other invoices. Quidos will, over time use the credit note it holds from Landmark, to offset future invoices from Landmark. In the same way Quidos customers can offset the credit notes Quidos issued against future invoices raised by Quidos.
Quidos is not sitting on a pot of cash. In fact it has incurred costs so that its customers can benefit. This exercise is not designed to benefit Quidos but rather to help those assessors who have overpaid Landmark in the past.”
We cannot comment on the process other organisations have adopted as we do not have the details but we hope this goes some way to explain what is happening with Quidos. We will consider the issuing of cash refunds after our next VAT return to HMRC.
