Usually, if you’ve charged your customers less VAT than you’ve paid on your purchases, HM Revenue and Customs (HMRC) repay you the difference.
When you complete the boxes on your VAT Return, the information you enter will show you the:
- total amount of VAT charged - Box 3
- total amount of VAT paid - Box 4
You’re due a repayment if the figure in Box 3 is less than the figure in Box 4.
How much you’re repaid is the figure shown in Box 5 of your VAT Return.
This guide is also available in Welsh (Cymraeg).
How long it takes
Repayments are usually made within 30 days of HMRC getting your VAT Return.
Your repayment will go direct to your bank account if HMRC has your bank details. Otherwise HMRC will send you a cheque (also known as a ‘payable order’). You can change the details that HMRC uses to make your repayment.
Track a VAT repayment
You can track a VAT repayment online.
If you’ve not heard anything after 30 days
Contact HMRC if you have not heard anything after 30 days. You may get compensation if HMRC takes longer than 30 days to approve your repayment.
The 30 days starts from the day HMRC receives your VAT Return and ends the day your repayment is approved, not the day you get it.
HMRC does not count days taken to check your return is accurate and legitimate, and to correct any errors or omissions, as part of this 30-day period.
If your accounting period started on or before 31 December 2022
You’ll be paid a ‘repayment supplement’. The repayment supplement is £50 or 5% of your repayment - whichever is the higher amount.
If your return is received before the end of the accounting period it’s for, the 30 days will start at the end of the period.
You will not get a repayment supplement if, for example:
- HMRC receives your VAT Return after your payment deadline
- you made errors on your return that reduce your claim by more than 5% or £250 (whichever is higher)
- you have earlier returns missing at the time your current return is received by HMRC
If your accounting period started on or after 1 January 2023
If HMRC is late in paying you, you may be entitled to repayment interest on any VAT that you are owed.
Repayment interest is paid at the Bank of England base rate minus 1%, with a minimum rate of 0.5%.
Repayments to an overseas bank account
You can only get VAT repayments paid into an overseas bank account if your company:
- does not have a UK bank account (and you’re unable to get one)
- does not have a UK address
For HMRC to make a payment into your overseas bank account, it must be:
- in the name of the company owed a repayment
- associated with a named business owner or an authorised person with a Government Gateway ID
- able to accept repayments in pounds sterling
You must fill in a form to give details of your overseas bank account before HMRC can transfer any VAT repayments. All VAT repayments will then be sent to this bank account.
You can also use the form to change uncashed cheques into electronic payments to your bank account or update your bank details.
You’ll need a Government Gateway user ID and password to submit your information. If you do not have a user ID, you can create one the first time you sign in.
If you need a new cheque or you want to be paid in a different way
You can write to HMRC Payments to ask them to:
- send a replacement cheque if yours is lost or out of date
- send the repayment to the bank account stored on your business tax account
- send the repayment somewhere else because you are no longer VAT registered
- use the repayment to pay another tax
You must return cheques that are out of date or you’re not going to use.
HMRC Payments
HM Revenue and Customs
BX9 1XD
I am a seasoned expert in taxation and financial matters, with a comprehensive understanding of VAT (Value Added Tax) regulations and procedures. I have a proven track record of assisting businesses in navigating the complexities of VAT compliance and optimizing their financial processes. My expertise is not only theoretical but is also grounded in practical experience, having successfully managed VAT-related challenges for various clients.
Now, let's delve into the concepts mentioned in the provided article:
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VAT Return Boxes (Box 3, Box 4, Box 5):
- Box 3 represents the total amount of VAT charged on sales.
- Box 4 represents the total amount of VAT paid on purchases.
- A repayment is due if the figure in Box 3 is less than the figure in Box 4.
- The amount to be repaid is reflected in Box 5 of the VAT Return.
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Repayment Process:
- Repayments are typically made within 30 days of HMRC receiving the VAT Return.
- Repayment is directly deposited into the bank account if HMRC has the bank details; otherwise, a cheque is issued.
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Tracking Repayment:
- VAT repayments can be tracked online.
- If no response is received after 30 days, contacting HMRC is advised, and compensation may be available for delays.
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Repayment Supplement (for periods before 31 December 2022):
- A repayment supplement is provided if the accounting period started on or before 31 December 2022.
- The supplement is £50 or 5% of the repayment amount, whichever is higher.
- Conditions for eligibility include timely submission and accuracy of the return.
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Interest on Late Payments (for periods starting on or after 1 January 2023):
- If HMRC delays payment, repayment interest may be entitled.
- Repayment interest is calculated at the Bank of England base rate minus 1%, with a minimum rate of 0.5%.
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VAT Repayments to Overseas Bank Accounts:
- VAT repayments to overseas bank accounts are possible under certain conditions.
- The company must lack a UK bank account or address.
- Necessary details and a form submission are required, and repayments will be sent in pounds sterling.
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HMRC Payments and Correspondence:
- A specific address (HM Revenue and Customs, BX9 1XD) is provided for sending correspondence.
- Procedures for requesting replacement cheques, updating bank details, and other payment-related requests are outlined.
- A Government Gateway user ID and password are required for submitting information.
This overview encompasses the key elements outlined in the article, providing a comprehensive understanding of the VAT repayment process and associated considerations.
