It is very common, and in some cases standard practice, for HMRC to check VAT repayment returns where:
- it is the VAT-registered business’s first VAT return;
- the business does not usually submit repayment returns; or
- the repayment requested is significantly larger than normal.
To query the return, HMRC generally sends a letter to the taxpayer’s principal place of business requesting further information before approving the repayment.
Historically, the information requested would need to be returned to HMRC by post, which could delay the VAT return repayment, or by email, with the taxpayer accepting the risk of sending sensitive information electronically.
On 2 November 2022, HMRC launched an online form that allows businesses to upload the requested information directly to HMRC by using the Government Gateway account linked to their VAT registration.
To use the form, the business will need:
- its VAT registration number;
- the CFSS reference number from the letter HMRC sent (for example, CFSS-1234567);
- details of its main business activities;
- the date it started trading;
- the VAT rates that apply to its sales;
- details of any VAT schemes it uses (for example the VAT cash accounting scheme)
- its detailed VAT account;
- its five highest purchase invoices; and
- any additional specific information requested by HMRC.
Agents will also be able to use the online form to reply on behalf of authorised clients by using an agent user ID and password. This could be either agent services account or HMRC online services credentials.
HMRC should respond to the information sent using the online form within seven working days. If it does not, the business or its authorised agent can contact HMRC using the telephone number quoted on the CFSS letter.
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