Revenue & Customs Brief 06/09 outlines HMRC'S position on retrospective claims under the Extra-Statutory Concession (ESC) for non-profit making membership bodies. Some bodies have been using the ESC to rework previously submitted VAT returns, and have submitted claims for ‘overpaid’ VAT. In HMRC's view, the ESC may not be used to make retrospective adjustments in this manner and will therefore reject such claims.

ESC permits a non-profit making membership body which supplies a single package of benefits to its members to apportion their subscriptions to reflect the value and VAT liability of the individual benefits, without regard to whether there is one principal benefit.

A practical example is where the principal benefit of a membership subscription is standard-rated, but there are ancillary benefits which, if supplied in their own right, would be zero-rated and/or exempt. In such a case, the body may apportion the subscription to reflect the different elements, rather than treating the whole subscription as standard-rated.

Revenue & Customs Brief 06/09 is available at http://www.hmrc.gov.uk/briefs/vat/brief0609.htm