Should you ever be in the unenviable situation where you’ve overpaid your VAT contribution, you may feel a little fraught. It can be a scary time to have overpaid. You may think that it is impossible to claim the money back from HMRC, or at best like pulling teeth (from a crocodile.) HMRC are absolutely notorious for clinging on to everything paid in (even if wrongly) and it can feel like that the overpayment is money which has gone forever.

It doesn’t have to be that way.

The act of overpayment is far more common than what you may think- Many businesses overpay their VAT via calculation errors or through multiple payments which can often be part of an automated process. The assistance of a good chartered accountant in North Wales can help you get what you’re owed in a pain (and stress!) free manner, regardless of the net value of the error.

It has to be said that the net value of the error changes the manner of which it is claimed back (and can be the source of very many headaches for business owners due to that fact) but a good chartered accountant will be well versed in reclaims, and they will adjust your VAT account accordingly to include the value of the adjustment on your current VAT return in a clear, careful, and precise manner, allowing you to get the full picture of what exactly has gone wrong, and have absolute confidence.

Your accountant will notify HMRC of the issue by submitting error correction form VAT 652. Keep in mind that an accountant will only be able to do so should the mistake not be more than 4 years old. Unfortunately, overpayments which are more than 4 years old are considered dead money, and you will not receive this back.

It should also be noted that HMRC are not liable to pay interest on the overpayment should you be liable for the mistake. Should your accountant find that the overpayment was indeed the fault of HMRC (it has been known to happen!) then the recovered amount will indeed come with any applicable interest, though this interest is taxable.

Your accountant will submit his or her claim for the interest on your behalf, and the claim will be treated separately from your return. Collecting returns from HMRC is generally considered quite a minefield, and should matters such as unfair enrichment – HMRC claiming that the interest you have charged your customers needs investigation – come to light, having a good accountant on your side and arguing for your behalf can be a real asset.