Refunds of VAT from HM Revenue & Customs

If you are registered for VAT, you can generally claim back VAT on goods and services you buy, but only if those purchases relate to sales you make that are liable for VAT.

This guide explains how VAT is repaid when you've paid more on your purchases than you've charged on your sales, and what to do before you register or after you de-register for VAT.

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How VAT is repaid

If the VAT you're reclaiming is more than the VAT you've charged on your sales, your return will show an amount owing to you, and you may be due a repayment from HM Revenue & Customs (HMRC). Any repayment will be paid directly into your bank account, but before HMRC make a payment, they follow a number of steps:

  1. When you submit your return, HMRC registers the date on which they receive it.
  2. HMRC carries out automated credibility checks. The majority of returns pass these checks and proceed immediately for payment.
  3. If the automated credibility checks select your return for further investigation, it will then be checked manually. It might be resolved and passed for payment by HMRC staff.
  4. If any queries can't be resolved, your return will be passed to a specialist team. These returns are given high priority. HMRC will try to resolve any queries with the minimum involvement or inconvenience to your business. They may be able to authorise the claim immediately, or may arrange to visit you to check the return.
  5. Once a claim has been accepted, repayment will be made directly into your bank account. To receive your repayment you will need to provide HMRC with your bank account details specifically for this purpose, even if you are already making payments to HMRC from this account through Direct Debit. You can do this, or amend previously given details, by following the links to 'Change your VAT registration details' found on this page and within your VAT online services area.

Read about reclaiming VAT on your purchases

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When to expect your repayment

HMRC aims to authorise 90 per cent of correct repayment claims within ten working days of their receipt. However, repayment can sometimes take longer and it is recommended that you only contact HMRC if you haven't heard anything after 21 days.

You can check when your repayment has been made by HMRC under 'Your HMRC Services' in the VAT online services.

If you've already signed up for the Business Tax Dashboard, you can also view your repayment there.

Read more about HMRC's Business Tax Dashboard

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Repayment supplement

If you have a legitimate claim for repayment but HMRC doesn't authorise your repayment within 30 calendar days of receiving your VAT Return, you may be due compensation, known as repayment supplement. If your return is received before the end of the accounting period, the 30 day period will not start until the end of the period. This is because you are not entitled to any input tax claimed on the return until the end of the accounting period. When HMRC calculates the time taken to authorise your payment, they can deduct the time taken to make reasonable enquiries to be satisfied that your claim is legitimate and accurate, and to correct any errors or omissions on your return. If certain conditions are met and a repayment supplement is due, it will be paid automatically, directly into your bank account, when HMRC authorises your repayment. You will not receive repayment supplement if:

  • you submit your return late
  • you have missing returns for earlier periods at the time your return is received
  • you have made errors on your return that reduce the net tax claimed by more than 5 per cent or £250, whichever is the greater

The repayment supplement is 5 per cent of the amount claimed on your return or £50, whichever is the greater. If your repayment is exceptionally delayed, HMRC may make an extra payment too.

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Reclaiming for the period prior to VAT registration

If you keep VAT invoices and other evidence of VAT payments made, you may be able to reclaim VAT on taxable goods and services you paid for before registering for VAT.

Find out more about reclaiming VAT on purchases made before VAT registration

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Reclaiming after you cease trading and de-register for VAT

After you cease trading and de-register for VAT, HMRC may allow you to reclaim VAT on the supply of goods and services that relate to the time when you were registered, and on certain services supplied after you de-registered.

Find out more about de-registering for VAT if you cease trading

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More useful links

More about repayments in VAT Notice 700/58

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