VAT Refunds

When Do You Get a VAT Refund?

Your VAT Return shows a refund when the VAT you’ve reclaimed on purchases (Box 4) is more than the VAT you’ve charged on sales (Box 3). Box 5 will be a negative number.^[2]

Common Reasons for Refunds

• Exporting — you zero-rate exports but reclaim input VAT on UK purchases
• Zero-rated sales — food producers, children’s clothing retailers, publishers
• Large capital purchases — buying equipment, vehicles, or property
• Start-up period — spending exceeds sales in the early stages

How Long Does a Refund Take?

HMRC aims to process VAT refunds within 10 working days of receiving your return. However:^[1]

• If HMRC needs to carry out verification checks, it can take longer
• HMRC may ask for supporting evidence (invoices, contracts)
• First-time refund claims often receive additional scrutiny

Verification Checks

HMRC may hold a refund for verification if:

• The refund is unusually large compared to your normal returns
• It’s your first return or first refund claim
• There’s an inconsistency in your return
• HMRC suspects an error or fraud

Repayment Interest

If HMRC takes more than 30 days to process your refund (from the later of the return due date or the date HMRC received it), they must pay you repayment interest.^[3]

How Refunds Are Paid

Refunds are usually paid directly into your bank account (the one registered with HMRC). Make sure your bank details are up to date in your HMRC online account.

Further Reading

• VAT Return Boxes Explained
• Zero-Rated Supplies
• VAT on Exports
• VAT Interest Charges