UK VAT refunds to foreign businesses made easier

HRMC announced plans to allow non-established businesses to receive UK VAT refunds directly in their foreign bank accounts.

16 November, 2021


HRMC project to ease VAT reimbursements to foreign businesses registered for VAT purposes consist of a form (GForm) where they confirm their bank account information. This Gform completed with the company’s bank account information will allow the UK tax authorities to send an electronic repayment, instead of the traditional paper payable order (or cheque) that they used to post to companies in the country of establishment. Provided that the foreign businesses complete the indicated form, VAT refunds will be sent directly to their foreign bank accounts.

Foreign businesses will receive UK VAT refunds quicker and easier after these changes are introduced. 

The changes are good news for those foreign businesses that normally receive paper payable orders when they are in refund position in their UK VAT returns. Very often, these non-established companies face issues to receive and cash the cheques issued by HMRC. This is partly due to Brexit and new banking requirements, but also because of delays on paper correspondence sent by HMRC abroad.  Also, the new measure for VAT reimbursements in the UK will avoid many visits in person to the bank branches cash these old payable orders.

How to benefit from this new procedure

The Gform will need to be completed on the company’s HRMC online profile – accessed via Government Gateway with the correspondent ID and password. The following information should be provided:

  • UK VAT registration number
  • Company’s address
  • Email contact address
  • Bank account information
  • Payable order information if necessary

Once the form is completed online, the tax authorities will set a lock on the company’s record to avoid sending any future paper payable orders (or PO), and instead an electronic repayment order will be issued to the bank account provided. The system that allows this electronic reimbursement is called CHAPS – standing for Clearing House Automated Payment System.

What about payment orders (PO) already received that cannot be cashed?

In this case, the company can submit the Gform informing about their bank details and complete also the section with the current payable order that they cannot cash in the country of establishment (PO). Automatically, the new electronic payable order should be issued, cancelling the paper payable order with no need of contacting the HMRC and request a CHAPS repayment.

Get help changing your bank details

Marosa can help you preparing and submitting the Gform and following up with HMRC until the changes are effectively introduced in the system. Our team has daily contacts with the Non-Established Taxable Persons Unit (NETPU) to follow up on these requests and sort out any existing repayment not yet received.

Get in touch!

Contact us to get help with your UK VAT refund.

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