THOUSANDS of Glasgow homeowners could be given back hundreds of pounds after claims they have been overcharged for repairs.

The possibility of the windfall comes after it was found Glasgow Housing association, Scotland's biggest landlord, may have overpaid tax for over-cladding and insulation work.

Up to £15million too much could have been handed over if it is confirmed an error was made in VAT charges, with some of that cost passed on to homeowners.

Owner occupiers believe the GHA mistakenly charged them full VAT at 17.5% for the work - despite being eligible for a rate of 5% under a special scheme.

GHA, who is in charge of more than 80,000 homes, has yet to confirm it is eligible for the reduction.

Today they promised homeowners would receive a refund if a mistake had been made.

With the work on each home costing up to £10,000, GHA could have overpaid by more than £1000 per property.

Homeowners pay no more than half the bill with the rest being met by grants.

Re-cladding has already been completed on more than 14,500 homes - around 2000 of them privately owned - with more refurbishments due next year.

The possible blunder only came to light after homeowner Conor McNally, of Whiteinch, received a bill for cladding work on his home and was shocked to discover he'd been charged the full VAT rate of 17.5%.

Mr McNally knew about the government scheme - a green incentive to encourage people to insulate their homes - after reading of it on the internet.

The 31-year-old called GHA to ask why the reduction wasn't being passed on to homeowners and was told by a housing manager they'd never heard of it.

Mr McNally, an IT project manager who lives with fiancee Judith Cole, said: "If we'd benefited from the reduction, our bill of more than £6000 would be £559 lower. We're getting married this year and the bill came as a huge blow."

According to insulation experts, the scheme is commonly used by contractors, who pass the reduction on to eligible customers.

A GHA spokeswoman said: "It appears that our contractors may have been inadvertently overcharging GHA 17.5% VAT.

"We are awaiting confirmation from HM Revenue and Customs on whether our contractors would have been eligible to charge a lower rate of VAT.

"If that's the case, GHA would be entitled to a refund which we would pass on to the homeowners involved with our apologies."

A spokesman for HM Revenue and Customs confirmed the rate reduction was available.