HMRC are always a little suspicious of businesses that claim a VAT repayment in their first VAT return, or a large refund in a later return. Should this occur, HMRC will write to the business asking for supporting evidence to be provided within 30 days.
Until recently the business had to reply, preferably by post with copies of relevant invoices, as HMRC would warn emails could be intercepted by third parties. To be on the safe side businesses would opt to post evidence, however this can result in processing delays at HMRC.
In early November HMRC opened a new portal where businesses can supply the further information online, as requested by the HMRC letter. To use the portal you need to quote the reference given in HMRC’s letter and supply other details about the business, including the five highest value purchase invoices relevant to the period.
HMRC should then reply within 7 working days.
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