VAT Repayments

VAT repayments occur when you’ve charged your customers less VAT than you have paid out during a VAT period. They often arise because:

  • a business has had a slow sales quarter or has poor customer collections if they are using the VAT cash accounting scheme;
  • a correction is made for VAT errors in previous quarters and there is missed VAT on expenses to reclaim;
  • the business is claiming back VAT on expenses incurred in months before the VAT registration date;
  • the business is new and set up costs have exceeded income.

The amount of VAT you are owed from HMRC will be shown in box 5 of your VAT return.

How Long Does it Take to Get a VAT Repayment

VAT repayments are usually made within 30 days of HMRC receiving your VAT return.

In most cases, repayments will be made straight to the bank account you entered into your .GOV account. HMRC will very occasionally issue cheques, although this is much less common these days.

Repayment Supplements

If you have not heard anything from HMRC and do not receive your repayment within 30 days, then you may be entitled to a VAT repayment supplement. This is either £50 or 5% of your VAT repayment, whichever is higher. But you won’t be entitled to this if:

  • you have submitted your VAT return late;
  • made errors on your return;
  • have earlier VAT returns missing at the time you submit your return that generates the repayment.

Read all my VAT Guides

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Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.