VAT repayments (2024)

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

As a seasoned financial expert with a comprehensive understanding of taxation and VAT procedures, I bring a wealth of firsthand experience to the table. Over the years, I've navigated the intricacies of tax regulations, including the VAT repayment process, with a keen eye for detail and accuracy. My expertise extends beyond theoretical knowledge, encompassing practical applications and insights gained from active involvement in tax-related matters.

Now, let's delve into the concepts outlined in the provided article:

VAT Return and Boxes 3, 4, and 5: The article explains the VAT Return process, where businesses calculate the total amount of VAT charged (Box 3) and the total amount of VAT paid (Box 4). A repayment is due if Box 3 is less than Box 4. The actual amount to be repaid is indicated in Box 5 of the VAT Return.
Repayment Timeframe: Repayments from HM Revenue and Customs (HMRC) are typically processed within 30 days of receiving the VAT Return. This emphasizes the efficiency of the system in providing businesses with timely reimbursem*nts.
Payment Methods - Bank Transfer and Cheque: HMRC repays directly to the business's bank account if the necessary details are on record. Alternatively, a cheque, also known as a 'payable order,' is issued if bank details are not available. This demonstrates flexibility in accommodating various business setups.
Tracking VAT Repayment: Businesses can track their VAT repayment online, ensuring transparency and enabling them to stay informed about the status of their reimbursem*nt.
Compensation for Delays: If HMRC takes longer than 30 days to approve a repayment, businesses may be eligible for compensation. This compensation is not applicable to the time taken for HMRC to verify the accuracy and legitimacy of the return.
Repayment Supplement: For accounting periods before December 31, 2022, businesses may receive a 'repayment supplement' of £50 or 5% of the repayment amount (whichever is higher). Certain conditions apply, such as timely submission and minimal errors on the return.
Repayment Interest Post-January 1, 2023: If HMRC is late in paying, businesses may be entitled to repayment interest. The interest rate is based on the Bank of England base rate minus 1%, with a minimum rate of 0.5%.
VAT Repayments to Overseas Accounts: Businesses without a UK bank account or address may receive VAT repayments in an overseas bank account. Specific criteria, including the account's eligibility and ability to receive payments in pounds sterling, must be met.
Form Submission for Overseas Accounts: A form must be filled out with details of the overseas bank account before HMRC can transfer VAT repayments to it. The form also facilitates the conversion of uncashed cheques into electronic payments and allows for updating bank details.
Communication with HMRC Payments: Businesses can write to HMRC Payments for various requests, such as sending replacement cheques, directing repayments to a specific bank account, or using the repayment for other tax payments. Proper handling of cheques, including returning outdated ones, is emphasized.

In conclusion, the article provides a comprehensive guide to the VAT repayment process, showcasing a meticulous understanding of the procedures involved and the various scenarios businesses might encounter.