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Classification of VAT Refund from HMRC

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We are due to receive a refund from HMRC regarding an overpayment of VAT i.e. VAT was paid in error when it should have been zero rated but system generated standard rate VAT. How should this refund now be treated in year end accounts i.e. income or negative expenditure for my year-end accruals?

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By johngroganjga
03rd Aug 2020 19:35

Your accountant will deal with it. Not something you need to worry about.

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By Wanderer
04th Aug 2020 00:24

nk443 wrote:
Classification of VAT Refund from HMRC

We are due to receive a refund from HMRC regarding an overpayment of VAT i.e. VAT was paid in error when it should have been zero rated but system generated standard rate VAT. How should this refund now be treated in year end accounts i.e. income or negative expenditure for my year-end accruals?

Probably / possibly neither of the options you have concluded. Best to take the advice above & discuss it with / leave it to your accountant who will have the knowledge of your circumstances necessary to properly advise.
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By Matrix
04th Aug 2020 06:26

Did you charge your customer the VAT on a VAT invoice or was the supply VAT inclusive?

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