Oil and gas contractor clients VAT repayment

Your contractor clients may be due a significant refund of VAT if in the past 4 years they have:

  • Contracted in the oil & gas sector
  • Registered and paid Flat Rate VAT (FRV) at 14.5%

This is based on the decisions made in the Tribunals of Idess Ltd and SL Subsea Engineering Ltd. As a consequence of these decisions we are satisfied that those businesses whose supplies are also of mechanical engineering services to the oil and gas industry are also entitled to a refund of the VAT they have overpaid.

Our consultants are successfully reclaiming VAT paid through a four year period, with an average re-claim value of £11,700.

Dealing with HMRC on your clients’ behalf our consultants will look to negotiate down the FRV rate from 14.5% to 12% resulting in a substantial repayment of VAT.

Our consultants will handle the whole process on your clients’ behalf, arranging any repayment due directly back to our contractor client. We charge a fee as a proportion of the VAT re-claimed on a ‘no win, no fee basis’.

Our consultants have already handled over 100 claims with VAT re-claimed of over £1M.

If you have any clients that you feel will benefit from this service please contact us by e-mailing your details to vatadvice@qdosvantage.com and one of our consultants will be in touch.

Idess Ltd and SL Subsea Engineering Ltd were companies providing mechanical engineering services to the oil and gas industry, both used the Flat Rate Scheme (FRS) and both decided that their services did not fall with the FRS trade sector “Architect, civil and structural engineer or surveyor” (FRS percentage of 14.5%), which was the sector HMRC specifically instructed should be used in the published FRS guidance. Instead both companies decided to use the FRS trade sector “Any other activity that is not listed elsewhere” (FRS percentage of 12%). At the subsequent First Tier Tribunals the Tribunals both decided in favour of the companies, considering that, in the circumstances of each case, HMRC’s instruction in their guidance was incorrect and thus the companies were entitled to use the trade sector they used.

Based on these decisions we are satisfied that those businesses whose supplies are also of mechanical engineering services to the oil and gas industry are also entitled to a refund of the VAT they have overpaid as a result of following the published HMRC guidance that the Tribunal has decided is incorrect.

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