Question

As Salamu Alaikum

We are a Company that exports goods to Countries. Therefore, we have to claim back VAT. Normally we receive our VAT payment within 1 or 2 months of submitting the VAT file.

However, last year we submitted our VAT file for October Month and we were told that HMRC needed to carry out further checks. We can enquire from them on update every 15 days.

In this way it took HMRC until mid February to authorise part payment for our VAT. They sent us confirmation email. Normally it takes up to 10 days for payment to reach our bank account. On this occasion we received nothing. Again we chased up with several emails. However we received no response.

Like this a month passed by. Finally we managed to get in touch by phone as the Officers phone was now switched on again.

We were told that the officers laptop had broken down so could not respond to emails. and the reason for us not receiving VAT payment was due to the fact it had not been processed correctly. Officer said she would give us an immediate reply and we will get supplementary payment.

We received email saying that all of our VAT was approved. When we received our VAT payment, we also received an additional amount of payment which they call Supplementary Payment , for the delay in paying us. As it was beyond the time that they needed for the checking.

Question is can we take this Supplementary Payment ? and is it permissible for us to keep ?

Pls answer May Allah reward you-

Answer

If the supplementary payment was given of their own accord as a compensation for taking too long to refund your VAT payments then it will be permissible for you to take this additional amount. This will not fall within the remit of interest as firstly you did not advance a loan and secondly it was not an excess payment stipulated in a contract for delayed payment. Rather, it will be considered a gift from the company.

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel