HMRC approach to processing repayment VAT returns

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • HMRC approach to processing repayment VAT returns
  • HMRC process
  • Repayment supplement
  • Appealing against HMRC’s decision

This guidance note provides an overview of the procedure that HMRC should follow when it receives a repayment VAT return.

Notice 700/58 ; De Voil V5.191 (subscription sensitive); VATA 1994, ss 79, 25(3); VATRS10050

See ‘Back tobasics ― VAT refunds, repayment supplement and interest’ by Karen Bullen in Tax Journal, Issue 1066, 21 (25 February 2011) (subscription sensitive).

Update: the draft Finance Bill 2018–19  legislation and explanatory notes. In Clause 32 and Schedule 14 of the draft legislation, changes have been introduced which will bring VAT into the scope of the provisions for repayment interest. The changes generally ensure that repayment interest works in the same way for VAT as it currently does for income tax self assessment with the exception of two areas around reasonable enquiry and missing returns. It is important tonote that the draft legislation contains provisions under which no repayment interest is paid on:

  • balancing payments for VAT payments on account when the payments of account exceed the total amount due on the VAT return
  • for any period where HMRC has a reasonable inquiry
  • any period where HMRC is correcting errors and omissions, or
  • for any period when there are other VAT returns missing at the time of receipt of the relevant return
  • for any period where notice is given toproduce evidence or security and that is not produced

These changes have been introduced as a result of the Making Tax Digital: interest harmonisation and sanctions for late payment   consultation.

HMRC process

The following process will be followed when a VAT return is received from HMRC:

  • HMRC’s computer

More on VAT returns: