Last updated: 14 October 2026
What should you do if a supplier charged you too much VAT?
Ask the supplier to issue a credit note and a corrected invoice. You can only reclaim the VAT that was correctly due, not the amount wrongly charged. So if a supplier added 20% to a zero-rated or exempt supply, or charged VAT when it wasn’t registered, you can’t reclaim it from HMRC. Your remedy is to recover the overcharge from the supplier, who can then correct its own VAT return and get the money back from HMRC.
Common overcharging mistakes
| Mistake | What you can reclaim |
| 20% charged on a zero-rated item, such as most food or children’s clothes | Nothing; get a credit note |
| 20% charged on an exempt service, such as insurance | Nothing; get a credit note |
| 20% charged instead of 5%, for example on qualifying renovation work | Only 5%; get a corrected invoice |
| VAT charged by an unregistered business | Nothing |
| VAT charged when the domestic reverse charge should apply | Nothing from the supplier’s invoice; account for reverse-charge VAT yourself |
| VAT added twice by mistake | Only the correct amount |
Why you can’t reclaim the overcharge
Input tax is only the VAT properly chargeable on a supply. HMRC can reject or assess any VAT you reclaim that wasn’t due, even if it’s on a valid-looking invoice.
What the supplier does
- Issues a credit note cancelling the overcharged VAT
2. Refunds you the excess, or offsets it against future invoices
3. Corrects its own VAT account in the period the credit note is issued
4. If the error is older, uses the error correction rules
A supplier can only reclaim overpaid VAT from HMRC if it refunds the customer. That’s called “unjust enrichment” protection.
If you’ve already reclaimed the excess
Reduce your input tax in the next return by the excess, or use the error correction process if the net error is over the threshold (£10,000, or 1% of box 6 up to £50,000).
Example
A builder charges a homeowner’s company 20% VAT, £6,000, on a £30,000 conversion of a barn into a home that qualifies for 5%. The correct VAT is £1,500. The company can only reclaim £1,500, not £6,000. It asks the builder for a credit note for £4,500 and a corrected invoice.
If you’re not VAT-registered
Consumers and unregistered businesses can’t reclaim VAT anyway, but they can still ask the supplier to refund an overcharge, because it is part of the price.
Preventing overcharges
Check the VAT rate on quotes before you accept them, especially for building work, food, energy-saving materials and imports. For new suppliers, check the VAT number and ask how they decided the rate. Catching errors at the quote stage avoids credit notes later.
Frequently asked questions
Can I ask HMRC to refund overcharged VAT?
No, you must recover it from the supplier.
What if the supplier has gone out of business?
You may be unable to recover it; HMRC won’t refund it to you.
Is there a time limit?
Suppliers can correct errors within 4 years.
Can I just reduce what I pay?
Agree it with the supplier and get a credit note.
Related: VAT on credit notes and 5% VAT on renovations.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with correcting VAT errors on invoices. See our VAT accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
