Who ends up in a refund position
A refund position is not a sign that something is wrong. It is a structural feature of certain business models, and it recurs predictably.
Exporters, because their sales are zero-rated while their costs carry input tax. Businesses in a heavy capital phase — fitting out premises, buying equipment, building a platform — where the spend precedes the revenue. Construction and contracting businesses at the front of a project, paying subcontractors and buying materials months before certification. And businesses making largely zero-rated supplies as a matter of course, such as certain healthcare and education providers.
What these have in common is that the credit is real and recurring, and carrying it forward indefinitely is simply a loan to the authority.
Who this is for
Any VAT-registered business whose input tax exceeds its output tax in a period, whether as a one-off or as a recurring feature.
The businesses for which this matters most are those where the amounts are material to cash flow — which is most construction businesses, most exporters at scale, and most businesses in a capital phase, precisely because that is the phase in which cash is tightest.
What the work involves
How we run it:
- Confirm the position is genuine before claiming. A refund position caused by a classification error is not a refund; it is an exposure with a claim attached to it.
- Assemble the documentation for the claim, not for the file. Tax invoices, import documentation, export evidence, contracts and payment proof, organised to answer the questions that will be asked.
- Test the input tax being recovered. Valid invoices, blocked items excluded, apportionment correct where partial exemption applies.
- Verify export and zero-rating evidence, since this is the most frequently queried element of an export-driven claim.
- Prepare and submit the refund request alongside the return.
- Handle the examination. Refund claims routinely attract information requests; as your tax agent we respond directly with documentation already assembled.
- Track through to payment and reconcile the amount received against the amount claimed.
Why claims get delayed
Delay is rarely about entitlement. It is almost always about evidence:
- Export evidence not retained at the time of shipment and reconstructed afterwards
- Input tax claimed on documents that are not valid tax invoices — a supplier statement or a proforma will not do
- Large one-off claims with no explanation offered up front for why the position arose
- Apportionment applied inconsistently, or not at all, in a partly exempt business
- Bank details or entity details not matching the registration exactly
- A first claim from a business with no filing history, where the authority has nothing to compare against
Most of these are solved before submission rather than after. A claim that arrives with its explanation attached is a materially faster claim than one that arrives as a number.
Refund or carry forward
Not every credit should be claimed as a refund. Where the position reverses next period — a one-off equipment purchase in an otherwise output-positive business — carrying it forward is simpler and costs nothing but a quarter of cash flow.
Where the position is structural, claiming is usually right, because the credit will otherwise keep growing. The judgement is about whether the cash matters more than the administrative effort and the examination that comes with it, and for a business in a capital phase the answer is almost always yes.
We will tell you when we think a claim is not worth making. A small credit in a business that will be output-positive next quarter rarely justifies the process.
What goes wrong
These are the failures we are brought in to correct, in rough order of frequency:
- Claiming a refund that is really a classification error. The examination will find it, and the position is far worse than not claiming.
- Submitting the claim and assembling the evidence afterwards, which turns a short exchange into a long one.
- Recovering input tax on invalid documents. A valid tax invoice is a specific thing, and a supplier statement is not one.
- Ignoring partial exemption in a business that has acquired an exempt income stream.
- Letting credits accumulate for years because the process seems like effort — that is an interest-free loan to the authority.
- Claiming a trivial amount that will reverse next quarter, and triggering an examination for no commercial benefit.
Deadlines that apply
A refund is requested alongside the return for the period, so the timing follows your tax period. For businesses in a structural refund position, monthly filing where available is worth pursuing, because it converts a quarterly cash cycle into a monthly one.
Processing time varies with the size of the claim and whether an information request follows. Assembling documentation before submission is the only variable genuinely within your control, and it is the one that most affects how long the claim takes.
What lands on your desk
- The refund position verified before claiming
- A documentation pack assembled to answer the examination
- The claim submitted with a written explanation of the position
- Information requests handled directly as your tax agent
- Refund tracked to receipt and reconciled to the claim
What to have ready
The list is short and you will have most of it already:
- The VAT return for the period, and prior period returns
- Tax invoices supporting significant input tax claims
- Import documentation and customs entries
- Export evidence for zero-rated supplies
- Contracts and payment evidence for large purchases
- Bank account details exactly as registered
- An explanation of why the refund position arose, which we help you frame
How this is priced
Quoted as a fixed fee based on the size and complexity of the claim, not as a percentage of the refund. Contingency pricing on a tax refund gives the adviser an incentive to claim aggressively, which is exactly the wrong incentive in a process that is going to be examined.
Where the claim is part of a recurring cycle, it is folded into the return preparation fee rather than charged separately each period.
Related
Frequently Asked Questions
When can I claim a VAT refund?
When input tax exceeds output tax for a period. It is requested alongside the return. The alternative is carrying the credit forward, which is sometimes the better answer for a small one-off position.
How long does a VAT refund take?
It varies with the size of the claim and whether an information request follows. The variable genuinely within your control is whether the supporting documentation was assembled before submission — a claim that arrives with its explanation attached moves considerably faster.
Why was my refund claim queried?
Most commonly: export evidence that was reconstructed rather than retained, input tax claimed on documents that are not valid tax invoices, a large one-off position with no explanation offered, or inconsistent apportionment in a partly exempt business.
Do you charge a percentage of the refund?
No. Fixed fee based on size and complexity. Contingency pricing on a tax refund gives the adviser a reason to claim aggressively, which is the wrong incentive in a process that will be examined.
Should I always claim rather than carry forward?
No. Where the position reverses next period — a one-off equipment purchase in an otherwise output-positive business — carrying forward is simpler. Where the position is structural, claiming is usually right because the credit will only keep growing.
Can I claim VAT on expenses from before registration?
There are provisions for recovering input tax incurred before registration in defined circumstances, subject to conditions on timing and on the goods or services still being held or used for taxable supplies. It is worth checking rather than assuming, particularly for businesses that registered after a capital phase.
What is bad debt relief?
Recovery of VAT you already accounted for on an invoice the customer never paid, once the conditions are met — six months elapsed, the debt written off, the customer notified. Construction and trading businesses routinely have unclaimed relief sitting in their ledgers.
Tell us how the position arose and how large it is. We will tell you whether claiming is worth it, and what the claim needs to carry with it.
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Last reviewed 27 July 2026. Rates, thresholds and deadlines change — the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.