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This publication is available at https://www.gov.uk/government/publications/revenue-and-customs-brief-12-2018-refunds-of-vat-in-the-uk-for-non-eu-businesses/revenue-and-customs-brief-12-2018-refunds-of-vat-in-the-uk-for-non-eu-businesses
1. Purpose of this brief
This brief explains the changes made to HMRC’s operational procedures when verifying claims for VAT refunds submitted by non-EU businesses under the Overseas Refund Scheme provided for in UK law by Part 21 of VAT Regulations 1995 (SI 1995/2518).
These operational changes will be applied to all claims for the prescribed year 2017 to 2018 and for future years.
This brief also explains what actions HMRC will take for claims for 2016 to 2017 and claims for 2017 to 2018 which have been rejected due to the new operational procedures which started on 23 May 2018.
You should read this brief if you are:
- a non-EU business
- an agent acting on behalf of a non-EU business
- a body or association representing the interests of businesses and advisers in relation to international VAT
If you are registered for business purposes in a non-EU country, you may have to pay VAT on goods and services you buy and use in the UK. You may have to also pay VAT for goods imported into the UK, for example if you take part in a trade fair.
If you’re not registered for VAT in the UK, you cannot reclaim this VAT as input tax. You may be able to use the Overseas Refund Scheme to reclaim VAT charged on imports into the UK or purchases of goods and services used in the UK for business purposes.
3.1 Apply to get a refund
You can apply to get a refund of the VAT incurred in the UK if you:
- are registered as a business in a non-EU country
- are not VAT registered in the UK and you are not liable or eligible to be VAT registered here
- do not have a business establishment or other residence in the UK or EU
- do not make any supplies in the UK, other than either:
- transport services related to the international carriage of goods
- goods and services where VAT is payable by the person you are supplying
3.2 Documents you need for a claim
You will need:
- an application for refund, this can be made on either form VAT65A or a similar form if it is produced by an official authority and contains the same information and declaration as set out in the VAT65A
- a certificate of status (CoS) proving you are registered for business in your own country, the CoS must show the nature of business and must be stamped by the official authority in your own country
- documentary evidence, for example original invoices, showing the VAT paid in the UK for business purposes
4. Acceptable certificate of status
HMRC issues form VAT66A which can be used by overseas claimants to prove that they are engaged in business activities at the time of the claim. Official authorities, for example the tax authority in the claimants’ country, may issue a similar certificate as long as it has all the information on form VAT66A.
The CoS must be the original and contain the:
- name, address and official stamp of the authorising body
- claimants name and address (read more about PO Box addresses)
- nature of the claimants business
- claimants business registration number
The CoS is only valid for 12 months. Once it has expired you will need to submit a new CoS.
4.1 Electronic Certificates of Status
HMRC is aware that some countries will only produce an electronic CoS (e-CoS) which has a link which HMRC can use to verify it is valid.
Claimants should submit a copy of the e-CoS with their paper application and HMRC will use the validation system in the country of issue to verify that the claimant is in business.
4.2 PO Box address
HMRC is aware that in some regions, the address of a business establishment can include a PO Box address because not all roads and buildings are numbered.
Where HMRC receive a CoS and it’s unclear whether the address given is that of the business establishment or a mailing address, we will request further clarification to establish that the claimant is carrying out business activities by requesting additional documentary evidence .
5. Operational changes
HMRC regularly reviews its operational procedures in light of new and emerging risks. On 23 May 2018 we made changes to our checks to ensure that only valid claims are paid.
One of the main changes was to ensure that the CoS submitted with the VAT refund claim complied with the legislative requirements set out in section 4.
We recognise that by not publishing these changes it has created an unintended outcome for both businesses and HMRC.
We have therefore reviewed our approach in respect of claims for the prescribed years 2016 to 2017 and 2017 to 2018 which were processed using the new procedures. Find out more information on what HMRC is doing about these claims in section 6 and section 7.
All applications for overseas refunds must satisfy the legislative requirements set out in section 6 of VAT Notice 723A in order to get the refund of VAT paid in the UK. If claims do not meet these requirements they will be rejected.
6. Claims for 2016 to 2017
If your claim for 2016 to 2017 (covering the period 1 July 2016 to 30 June 2017) was processed and rejected before to 23 May 2018, then the claim remains rejected and you would have been notified in the rejection letter of your rights to request an internal review or appeal to the Tribunal.
We will only reconsider claims for 2016 to 2017 submitted by the 31 December 2017 deadline which were processed from 23 May 2018 onwards, and have been rejected as having an invalid CoS by HMRC applying its new operational procedures.
If we find that these claims would have been valid under the old operational procedures before 23 May 2018, and we have enough information to support the claim, these will be repaid and we will write to claimants with a new decision letter in due course.
There will be claims that we may need to ask claimants to resubmit the supporting documentation, for example original invoices, before the claim can be refunded. If this applies to your claim we will send you a letter by 31 December 2018 explaining what you need to do.
Where claims are reconsidered and we find that they would have been rejected under the old operational procedures (applied before to 23 May 2018), then a new decision to reject the claim will be issued by 31 December 2018 which will explain your new review and appeal rights.
Where claims for 2016 to 2017 were rejected under the new operational procedures (from 23 May 2018) and you have asked for an internal review or appealed to the Tribunal, HMRC will reconsider these claims and will write to claimants by 31 December 2018 explaining what happens next.
7. Claims for 2017 to 2018
The new operational procedures will be applied to all claims for 2017 to 2018 (covering the period 1 July 2017 to 30 June 2018) that have either already been submitted to HMRC or we receive by the 31 December 2018 deadline.
For new claims, HMRC understands that claimants may not have time to get a valid CoS from their official authority in time to send this with their claim so we will allow claimants an additional 90 days to submit a valid CoS, which means the CoS must be submitted by the 31 March 2019.
It is important to note that new claims for 2017 to 2018 must still be received by HMRC by the 31 December deadline and the 90 day extension only applies to submission of a valid CoS. Claimants should attach a covering letter with their refund application that a valid CoS will follow.
Any new claims for 2017 to 2018 received by the 31 December 2018 deadline that are not supported by a valid CoS by the 31 March 2019 will be rejected.
Where you have already submitted a claim for 2017 to 2018 and this has been rejected under the new operational procedures (from 23 May 2018) and you have not asked for an internal review or appealed to the Tribunal, HMRC will be reconsidering these claims and will write to all claimants by 31 December 2018 asking them to submit a valid CoS and supporting documentation to verify their claim by 31 March 2019.
For 2017 to 2018 claims where you have asked for an internal review by HMRC, appealed to the Tribunal or where litigation is in progress, HMRC will be reconsidering these claims and where appropriate will be asking claimants to submit a valid CoS and supporting documentation.
8. Claims for 2017 to 2018 from US claimants
HMRC has been made aware that, in relation to claims for 2017 to 2018, US claimants may not have been able to get and submit a valid CoS by 31 March 2019. The reason being that the US government ‘shut down’ has caused long delays in processing requests for a valid CoS.
HMRC has agreed that due to this unforeseen circumstance, we will allow US claimants an additional 60 days to submit a valid CoS. The revised deadline for US claimants to submit a valid CoS is now 30 May 2019.
The 60-day extension is only for US claimants to submit a valid CoS in relation to claims for the 2017 to 2018 period. The deadline to submit a valid CoS for 2017 to 2018 claims from claimants from other jurisdictions remains 31 March 2019.
In all cases, all other documentary evidence required to process the 2017 to 2018 claims must have been submitted by 31 December 2018.
9. Claims for 2018 to 2019 and future years
All applications for refunds must satisfy the legislative requirements set out in section 6 of VAT Notice 723A in order to obtain the refund of VAT paid in the UK. If claims do not meet the requirements they will be rejected – however, HMRC will as necessary, ask for clarification from applicants where validity is unclear.
10. Where can I get more information
You can read more information in VAT Notice 723A.
Contact the UK VAT Overseas Repayment Unit if you have a query about an application you have sent to them.