Foreign VAT refunds ― refunds of UK VAT to overseas businesses

Produced by Tolley

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
  • 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...

Foreign VAT refunds ― refunds of UK VAT to overseas businesses

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.

See the Foreign VAT refunds ― obtaining refunds from EU member states 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 responsible for accounting for any VAT due (ie the customer is required to account for VAT using the reverse charge)

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