161. —
(1) Save as the Commissioners may otherwise allow, where the claimant owed an amount to the debtor when the debtor became insolvent which—
(a)either—
(i)under the law governing the insolvency of the debtor can be set off, or
(ii)cannot be so set off but in respect of which payment can be lawfully demanded of the claimant by the person with whom the claimant proves in the insolvency of the debtor, and which is not so paid at the time the claimant makes his claim to the Commissioners, and
(b)the claimant made only one supply to the purchaser,
the outstanding amount of the consideration in money for that supply shall be reduced by the amount which the claimant owed the debtor and any refund shall be calculated from such reduced outstanding amount of the consideration in money.
(2) Save as the Commissioners may otherwise allow, where the claimant owed an amount to the debtor when the debtor became insolvent which—
(a)either—
(i)under the law governing the insolvency of the debtor can be set off, or
(ii)cannot be so set off but in respect of which payment can be lawfully demanded of the claimant by the person with whom the claimant proves in the insolvency of the debtor, and which is not so paid at the time the claimant makes his claim to the Commissioners, and
(b)the claimant made more than one supply to the purchaser and no part of the total amount of the consideration in money for those supplies was paid,
the outstanding amount of the consideration in money for each supply upon which VAT was accounted for and paid shall be reduced to an amount obtained by dividing the consideration in money for such supply by the total amount of the consideration in money for all supplies (whether taxable or otherwise) and multiplying this by such total amount less the amount which the claimant owed the debtor, and any refund shall be calculated from such reduced outstanding amount of the consideration in money.