Where the situation is reversed and the VAT refunded to the business exceeds the VAT paid in the assessment period, the difference should not be treated as a gross receipt of the business and should be ignored.
The assessment period for the self-employed person is six months. Within that period, two VAT returns are made. In one, a payment of £100 is made and in the other a refund of £300 is received. As the refund exceeds the payment by £200, the decision maker ignores the amount when calculating earnings.
