Foreign VAT refunds ― refunds of UK VAT to overseas businesses (from 1 January 2021)

Produced by Tolley
Foreign VAT refunds ― refunds of UK VAT to overseas businesses (from 1 January 2021)

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Foreign VAT refunds ― refunds of UK VAT to overseas businesses (from 1 January 2021)
  • When might a foreign business require a refund of UK VAT?
  • When is someone eligible to make a refund claim?
  • What VAT can be reclaimed?
  • What VAT cannot be claimed?
  • How to submit a refund claim
  • Time limits for submitting claim
  • Minimum claim limits
  • Supporting documentation for refund claim
  • Certificate of status / business activity
  • More...

The note provides details of the procedure that needs to be followed by overseas businesses in order to reclaim UK VAT they incur from 1 January 2021.

Please see the Overseas VAT refunds (until 31 December 2020) guidance note for the 13th Directive refund procedure that was used for non-EU businesses making claims before 31 December 2020.

See the Foreign VAT refunds ― obtaining refunds from EU member states (from 1 January 2021) guidance note for details on recovering VAT incurred in EU member states.

When might a foreign business require a refund of UK VAT?

Sometimes, a foreign business which is not registered for VAT in the UK may nevertheless incur UK VAT for a business purpose.

A typical example of this would be where the foreign business takes part in a UK trade fair and is charged UK VAT.

Because the business does not have a UK VAT registration number, the UK VAT cannot be claimed as input tax via a UK VAT return in the normal way. However, subject to meeting certain conditions, it may be possible for the foreign business to make a claim for a refund of the UK VAT via a separate process.

When is someone eligible to make a refund claim?

The foreign business must satisfy certain eligibility requirements in order to make a refund claim, namely:

  1. it must be registered as a business in an overseas location

  2. it must not be VAT registered in the UK or required to be VAT registered in the UK

  3. it must not have a place of business or a place of residence in the UK

  4. it must not make supplies in the UK with the exception of:

    1. transport services related to the international carriage of goods

    2. supplies of services where the person receiving the supply is res

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