Green Circle Talks about Cross-border] About UK VAT Refunds

Generation of tax rebates

Negative returns will result in tax refunds. If a seller chooses to pay import VAT instead of PVA (deferred VAT) during customs clearance, and the sales VAT is basically zero after the platform withholds and pays on behalf of the seller, there will be a sales VAT < import VAT, i.e., a negative VAT due, in which case a tax refund will be generated.

Time required for tax refund

Refunds are usually made within 30 days of HMRC receiving your VAT return.

Forms of Tax Refund

Tax refunds can be issued in three forms: checks, VAT accounts, and refunds to the seller's third-party bank account. If the account is not bound in time or is bound later, the refund may be issued in the form of a check. Checks require a bonded bank account and are processed by the IRS; VAT accounts leave the refund in the account; and if a third-party bank account has been bonded, the IRS will automatically return the refund to the bonded bank account.

Tax Refund Operations and Bonding Requirements

Sellers are required to bind a third-party bank account for tax refund before making a negative tax return (which can be used after the first binding), and the tax refund amount will be refunded to the bank account directly by the Inland Revenue. If you don't, a refund check will be issued (only available from UK banks).

Bundled accounts are required:

1. Account name (must match VAT company name)
2. Six-digit Sort code
3. Eight-digit Account number

Common Reasons for Tax Refunds

1. Previously, there were unpaid tax debts and the refund amount was utilized to cover the tax debts;
2. The Inland Revenue Department does not recognize the reporting data;
3. You need to contact the Inland Revenue Department for confirmation.

(If you apply for a tax refund before filing a return, the negative amount will be refunded directly to your bank account; if you apply for a tax refund after filing a return, you will need to communicate with the IRS to have the previous balance canceled out of the check and refunded to the designated bank account, and the statute of limitations is generally about six months.)