Have you ever asked yourself the question ‘how long does a VAT refund take’, searching desperately for an answer on Google? We don’t blame you! Truthfully, understanding the entire process of filing a VAT refund can be like learning a different language. It’s complex, with high stakes, which is exactly why we at Williamson & Croft are here to help you.
If you’ve often wondered about the intricacies of what VAT returns are and how long VAT refunds take, we’ve carefully outlined this article to provide you with some definitive answers. Read on to receive a proper answer to the oft-complicated question, ‘how long does a VAT refund take?’ once and for all.
How Long Does a VAT Refund Take?
Once HMRC has received your VAT return, you should receive a VAT refund in 30 days. Sometimes, VAT refunds can be processed in as quickly as 10 days! Nevertheless, a month is usually to be expected, and there are a few reasons for this that we’ll elaborate on in the remainder of this article. In fact, if your refund takes longer than this stretch of time, you may receive compensation from the HMRC.
At Williamson & Croft, we are expertly positioned to address all your tax-related needs. If you have other queries that need to be addressed, seek out our expert tax accountancy services. Our team of accountants in Manchester & Liverpool will be happy to assist.
The VAT Refund Process
If you’ve paid more VAT than you’ve charged as a business, or you’ve purchased taxable goods or services to serve your enterprise, this is where the VAT refund process begins. Not everyone can claim back VAT though – you must be VAT-registered with the HMRC and considered a taxable person. If items you’ve purchased have been used exclusively for your business and nothing else, this makes you eligible for a VAT refund. Bearing this in mind, here are the main steps of the VAT refund process:
1. Get accurate records together
When filing a tax return in the hopes of a tax refund, it’s important to get accurate records of all your business transactions together. This includes VAT invoices from any suppliers you work with, and if you happen to lose a VAT invoice, always request a duplicate. We can’t understate the importance of clear record-keeping!
2. Fill out your VAT return
The next step is to fill out your tax return for filing. This is done through an online VAT return form, accessible through the government website. The form guides you through the process, though you must be prepared to answer questions about the VAT you’ve charged and paid.
If you’ve charged more VAT to customers than you’ve paid out for business expenses, you owe the difference to HMRC. If the reverse is true, you can freely claim your VAT refund!
3. Make your claim
To make your VAT refund claim, fill out box 4 on the VAT return form with the amount you are reclaiming. Then, fill in boxes 1, 6 and 7 where relevant with information about your total sales, the VAT due on these sales, and goods purchased for your business.
4. Submit your VAT return and await your refund
Once you’ve filled in your VAT return, you can submit it to HMRC via their online system. The money you’re owed is paid directly into your bank account! In practicality, the claims process is simple – what makes it complicated is keeping poor records, or missing HMRC’s deadlines.
The key parties involved in processing a VAT refund are you and your business, HMRC, and the accountants at Williamson & Croft. As we’re able to prepare and submit complex tax returns on your behalf, we can alleviate the stress of the VAT refund process to your ultimate benefit.
Processing Time Factors
Although we have answered the pressing question of ‘how long does a VAT refund take?’ there are still some processing time factors for you to consider. Refund timelines can vary wildly between one person and their business, and the next. Factors affecting refund timelines include:
- The accuracy of your submission
- The method of submission, whether you filled in your form online or on paper
- The method of refund, i.e., cheque or direct bank transfer
- The current tax period
- The volume of your business transactions
- HMRC audits
- Eligibility and compliance concerns, especially if new regulations have been introduced
If the processing of your VAT refund has taken longer than a month, this could be due to seasonal factors like a busy tax season, or the fact that your business has complex transactions that require careful combing through. Another challenge business owners face is the constant hunt for appropriate documentation depending on VAT regulatory changes in the UK, the last of which is dated to April 2022.
Tips for Faster Refunds
If you would like your VAT refund back as quickly as possible, it’s important to be accurate during your form’s submission. We recommend you do the following during submission as a precautionary measure, otherwise you could face frustrating delays to your VAT return refund:
- Input your VAT number correctly
- Use digital submission methods (mistakes are easier to correct than on paper forms)
- Familiarise yourself with current VAT regulations
- Classify your transactions correctly, i.e., standard-rated, zero-rated or exempt
- Use the correct VAT rates for your different goods and services
- Seek professional advice
Contact Williamson & Croft for expert tax accountancy today
When it comes to claiming a VAT refund, as we’ve mentioned above, it’s always best to seek professional advice. If you’re wrestling with complex transactions or legal compliance, consider consulting with a Williamson & Croft accountant. We’re here to help you with all things tax, simply call via 0151 303 3112 or reach out through our contact page.