HMRC's consultation document on the VAT treatment of refunds made by manufacturers has been published. The deadline for responses is 31 August 2013.

The consultation seeks views of manufacturers who pay rebates to consumers of their goods purchased through retailers.

It hopes to discover the extent to which manufacturers make such payments; to consider how UK law needs to change to accommodate them; what impact that may have and what administrative burdens it may give rise to.

UK law currently expressly allows a business in a direct relationship with a customer to adjust the VAT originally accounted for in the case of a post-supply adjustment to the consideration. It is silent on the position where a manufacturer, which has no direct relationship with the final consumer of its products, makes a post-supply payment.

More details are available from HERE