Latest VAT News

VAT group delays

HMRC confirmed with the ICAEW that there is a significant delay in processing VAT group applications.  HMRC are currently (as of January 2022) dealing with applications received in July 2021.  Whilst waiting for HMRC to process VAT group applications, the business(es) must continue to act on the basis they are NOT in a VAT group and continue to charge VAT inter-company.

VAT Refunds now payable to overseas bank accounts

In December 2021, HMRC published new guidance in relation to UK VAT-registered businesses that do not hold UK bank accounts.  Any VAT refunds due could only be paid into a UK bank account, in the absence of a UK bank account, HMRC issued a payable order/cheque in the post, this was inconvenient for many overseas-based businesses.

Overseas businesses often struggle to open a UK bank account where the Directors of the company are not UK resident, at the same time, Brexit has meant many overseas businesses have a requirement to register for VAT and this combination has led to a change of policy from HMRC.

The overseas business can log onto their government gateway for VAT and download a form “GForm” which will allow the business to provide overseas bank details, HMRC can then process this form manually and set-up the automatic refund to the overseas bank account.

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