If a recipient of a supply makes an overpayment of VAT (usually as a result of standard rated tax being charged when a supply is reduced rated, zero rated or exempt), the remedy for the customer is to go to the supplier to obtain a new invoice or a VAT only credit note and repayment of the VAT paid.
However, this can cause practical problems, disputes and an actual cost if a supplier has ceased business or become insolvent. HMRC has recognized that if the supplier has paid output tax on the supply then there is an inherent unfairness.
Source: marcusward.co
