Is it worth contacting HMRC to warn of VAT refund?

Client has large VAT due to property purchase

Didn't find your answer?

Client bought their business premises in the quarter so there is a large VAT refund.

Client concerned about VATman interest and would consider contacting them to say why. I commented that any letter to HMRC would just get lost in the system. And a call would be useless too given staff on their phone (HMRC).

Should I suggest client calls or write? What do you do?

 

Thank you

Replies (13)

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Stepurhan
By stepurhan
28th Apr 2017 17:27

Any letter won't be dealt with before the return is submitted. You are very unlikely to get anyone to understand on the phone.

Either they refund it or they query it, and you can explain then. I am assuming your client's concern is just the general concern of having to deal with HMRC and not the concern of someone who has things to hide.

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Replying to stepurhan:
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By WhichTyler
28th Apr 2017 17:40

Has your client had an inspection recently? I f so it may be worth writing to the officer to explain and enclose copies of relevant invoices. Doesn't take long and may reduce need for refund to be held up while a visit is scheduled

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Replying to stepurhan:
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By HeavyMetalMike
28th Apr 2017 17:50

Thanks. Yes it's just concern about HMRC interest. There is nothing wrong with this transaction.

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RLI
By lionofludesch
28th Apr 2017 17:38

Doubt if it's worth the effort. If they don't like it, they'll ring you. If you send a letter, they'll never find it.

It's progress.

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By DMGbus
28th Apr 2017 18:38

In certain circumstances I do write or phone HMRC regarding an out of pattern VAT refund before the return is rendered. The most recent instance was in respect of a refund in excess of £50,000 where the trader usually made payments to HMRC. This action did seem to speed up the repayment due.

This approach was also advocated by a VAT lecturer earlier this week. This lecturer said that a letter to HMRC containing a copy of the relevant tax invoice(s) would be scanned into HMRC's database and then be available when the inevitable credibility check arises.

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By shaun king
29th Apr 2017 17:14

Chrikey a letter scanned and placed on the file that quick!! HMRC will just contact your client - either they will want invoice e mailed to them or they will want to visit. It is no drama trust me!!

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By mumpin
30th Apr 2017 17:17

Had the same set of circumstances recently. Resulted in a £30k refund. Client received a letter within 2 weeks asking for largest purchase invoices to be sent in or scanned and emailed.
I scanned and emailed. Vat officer replied to my email within an hour saying that she had authorised the refund.
I was impressed!

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Replying to mumpin:
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By raybackler
03rd May 2017 10:24

I had the same experience recently. It was quick and efficient, just as you described.

In the past I have written, but it is HMRC automated systems that decide whether a refund surfaces to be checked. When their letter arrived, I phoned to say they had the answer on file already, but it had not been read and it did not head off being selected. As writing in advance won't stop you being selected, I would now wait for contact from HMRC and just answer it as it has been developed into an efficient process.

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By tomnqm
03rd May 2017 10:11

We had this twice at my previous job, first time the money for the VAT refund appeared in our account with no HMRC correspondence and I think the second time they asked for some documents relating to the purchase.

They will get in touch with you if they need to but it will be a 1 minute conversation.

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By pauljohnston
03rd May 2017 10:16

A recent discussion with a VAT office indicated that information sent to support a VAT return really helps matters. In this case it was a refund on submission of the first VAT Return.

What is there to loose send in a letter just prior to submission of the return giving details of items causing refunds and attach copy invoices etc.

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By Sam Beedle
03rd May 2017 10:31

I have also recently been through this situation. Due to a refurbishment we had a large refund due to us instead of the usual payment.

We were contacted by HMRC who requested details. Once copies of invoices and explanations were given the funds were released.

Due to various other projects resulting in fluctuating amounts due / refunds and a disclosure being sent to HMRC we then had a VAT visit.

Following their visit the VAT inspector told me as I now had her as a contact I could write to her if I had any more refunds and she could expedite any refunds due.

If you have a contact I would write. If you don't then I wouldn't bother. The process if they want to query it is as quick as you can react and return the require information. Pretty painless really.

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Replying to Sam Beedle:
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By Vaughan Blake1
03rd May 2017 13:16

Chances are that she will have left next time a refund is due!

Generally these are dealt with on a same day basis so only a small delay.

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By Michele Harris
03rd May 2017 14:33

I used to work for HMRC and dealt with these queries. I would always advise businesses expecting an unusual repayment to write in to HMRC stating the reason it has occurred and (if appropriate) attaching high value vatable purchase invoices so they can process the query as quickly as possible. HMRC has to pay a 'repayment supplement' if they take longer than 30 days to repay you the money. This 30 day period is put on hold every time they contact your client and have to wait for information to come in so, if you have already provided the proof of the repayment, they are very eager to move the case on in order that they are not labile for the penalty. Repayment supplements will reflect on their end of year performance and could lead to an officer being noted as underperforming!

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