How to Reclaim Overpaid VAT
The United Kingdom's Revenue and Customs agency makes options available to you if you overpaid your value-added tax, or VAT. Generally, provided that the overpayment is less than 10,000 British pounds (about £10,270 as of January 2011), you can correct the error by adjusting your VAT return for a later period. If you overpaid because the tax agency made the error, you may be able to collect interest on the overpaid amount.
Calculate how much you have overpaid. Specifically, you should check to see if you have overpaid more than 10,000 British pounds.
Adjust the VAT return by the amount you have overpaid the next time you file a return, if the amount you overpaid is less than 10,000 British pounds. Make the adjustment in the appropriate box on your return. Box 1 is for VAT due from sales or outputs, so adjust this amount in this box if you have overpaid VAT in the past. Box 4 is for VAT you are claiming due to purchases, so adjust this amount if you have claimed too little VAT in the past. Box 2 is for VAT due to you from purchases in other EU countries, so adjust this amount if you have claimed too little VAT in the past on this category of purchases. Box 3 is for total VAT due, so adjust this amount by the total VAT you are owed.
If the amount you overpaid exceeds 10,000 British pounds, inform the tax agency of the error by completing and filing VAT Form 652, which is available on the official Revenue and Customs website.
Send a letter to your local Revenue and Customs office within four years of making the original VAT payment, if you want to collect interest on an overpayment that you believe was the fault of the government. Your letter should describe the payment on which you are claiming interest, and the reason you are claiming it. Include in the letter pertinent information the tax agency can use to identify you, including name, address, daytime phone number and VAT registration number. You can find your local tax office on the official website of the Revenue and Customs agency.
- HM Revenue & Customs: What to Do if You Made a Mistake on an Earlier VAT Return
- HM Revenue and Customs: Claiming Interest on VAT Overpaid as a Result of HMRC's Error
- Business Link: How to Complete Your VAT Return Box by Box
- HM Revenue and Customs: Contact Us
- HM Revenue and Customs: Questions About VAT