Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many sole traders have experienced delays in repayment of VAT following an HMRC VAT Refund software upgrade in 2021; and what steps his Department is taking to tackle those delays.

HMRC made no upgrades to its VAT repayment software in 2021. There are no current delays, other than those that may occur from time to time in the course of business when HMRC carries out additional checks on a repayment claim.

HMRC makes VAT repayments to over half a million VAT registered businesses every year, including sole traders. It is important that HMRC makes checks on repayments in order to prevent fraud. HMRC aims to complete these checks as quickly as possible to minimise disruption for businesses.

HMRC’s code of practice for dealing with delayed VAT repayment returns is set out in Notice 700/58. As explained in the notice, HMRC will in certain circumstances pay a repayment supplement if a repayment is not made within 30 days. Over 95 per cent of repayments are made within 10 days and over 99.75 per cent of repayments are made within 30 days.