Guidance

Claim VAT refunds in Northern Ireland or the EU, if you’re established in Northern Ireland or in the EU

Find out how Northern Ireland and EU businesses can claim refunds of VAT incurred on goods in the EU and Northern Ireland using the EU VAT refund system.

Applies to Northern Ireland

1. Overview

1.1 What this guidance is about

This is a public notice which under regulation 86 of the VAT (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 SI (SI2020/1545) allows HMRC to deal with specific issues of VAT refunds under the Northern Ireland Protocol. Parts of this notice have force of law and will be indicated in each case.

This notice explains how Northern Ireland and EU businesses can claim refunds of VAT incurred on goods from 1 January 2021 in the EU and Northern Ireland using the EU VAT refund system.

The 31 March 2021 was the deadline for submission of claims for VAT refunds in EU member states, where the VAT was incurred on or before 31 December 2020.

1.2 Laws that cover this guidance

UK law:

  • Value Added Tax Act 1994, Section 39
  • The VAT (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 SI (SI2020/1545)

2. Refunds of VAT for Northern Ireland and EU businesses (Northern Ireland Protocol)

2.1 Introduction

The Northern Ireland Protocol (‘Protocol’) to the Withdrawal Agreement means that Northern Ireland maintains alignment with the EU VAT rules for goods. Under these arrangements from 1 January 2021, the EU legislation for VAT refunds continues to apply in Northern Ireland in respect of goods only. EU rules will not apply to supplies of services in Northern Ireland. For information on how to reclaim VAT incurred on services, see sections 3 and 4 of Notice 723A.

Supplies of goods and services made elsewhere in the UK will be subject to UK rules. Any reference to the UK in this guidance must be read in the context of processing VAT claims on goods traded in Northern Ireland.

2.2 Refunds of VAT on goods

Businesses established in Northern Ireland who incur VAT on goods in the EU, and EU businesses that incur VAT on goods in Northern Ireland, will be able to recover this VAT through the electronic cross-border refund system. This enables a business to recover that VAT directly from that country (the UK or EU member state of refund) provided that it is not established in the country of refund and makes no supplies there.

Requests for refunds will continue to be dealt with by the country of refund. The amount refundable will also continue to be determined under the deduction rules of the country of refund and the relevant repayment will be made directly by that country to the business. The system will be an electronic one, with specified timescales and interest payable if these are not met.

2.3 General rules of the refund scheme

Electronic claims will be completed and submitted through the competent authorities in the UK or the EU member state in which the claimant is established.

2.4 Who can apply under the EU VAT refund system

The applicant must:

  • be a taxable person established in Northern Ireland or an EU member state, or their authorised agent
  • have a valid VAT number in an EU member state or, in the case of Northern Ireland, have a valid UK VAT registration number and be identified as trading under the Northern Ireland Protocol
  • reclaim VAT on invoices containing the purchase of goods only

The applicant must:

  • not be registered, liable or eligible to be registered in the UK or EU member state from which they are claiming the refund
  • have no fixed establishment, seat of economic activity, place of business or other residence there
  • not have supplied any goods in the UK (including Northern Ireland) or EU member state of refund during the refund period

2.5 Checks by the member state of establishment

Basic registration checks will be carried out by the country where you are established before the application is forwarded electronically to the UK or EU member state from which the refund is being claimed.

The country where you are established will not forward the application to the UK or EU member state of refund where, during the period of refund, the applicant:

  • is not a taxable person for VAT purposes
  • makes only exempt supplies
  • is covered by the exemption for small enterprises
  • is operating the Flat Rate Scheme for farmers

If your application is not forwarded to the country of refund, you will be notified of this decision.

2.6 Applications

A separate application must be completed for each EU member state. Applications can be commenced and stored in an incomplete state on the system. These may be recalled, finalised and submitted at a later date.

2.7 Application periods

The period covered by a refund claim must not be more than 1 calendar year or less than 3 calendar months unless the period covered represents the remainder of a calendar year (for example, where interim applications have already been submitted earlier in the year, or if the applicant has recently become VAT-registered).

2.8 Minimum amount for a claim

If the refund application relates to a period of less than a calendar year, but more than 3 months, the minimum amount claimable is 400 euros or the equivalent in national currency.

If the refund application relates to a period of a calendar year or the remainder of a calendar year the minimum amount claimable is 50 euros or the equivalent in national currency.

2.9 Time limits for making an application

Properly completed applications must be submitted to the UK or EU member state at the latest on 30 September of the calendar year following the refund year. If you cancel your VAT registration during the refund year you should submit your application as soon as possible following cancellation of your VAT registration.

2.10 Scope of application

Claims that can be included on your applications are:

  • supplies of goods in Northern Ireland or an EU member state with a tax point during the period of the refund application goods imported into Northern Ireland or EU member state of refund during the period of the refund application

In addition, the application may include supplies or imports not included in a previous application as long as they relate to the same calendar year.

The application may not include:

  • amounts of VAT that have been incorrectly invoiced
  • invoices sent to EU member states that relate to goods exported outside Northern Ireland or the EU
  • invoices that contain supplies of both goods and services

2.11 Partial exemption

If you make both taxable and exempt supplies, any restriction to the amount of VAT claimable should be applied before making your application.

2.12 Information covered in the standard fields

There are standard fields of information and expense codes, that will aid completion and are mandatory. It you do not include all standard information, this will result in your claim being rejected.

It is important to note that if a fully completed application is not received by 30 September of the year following the refund period, this will render it out of time.

Standard fields

  1. Applicant’s name and full address.
  2. An address for contact by electronic means (email address).
  3. A description of the applicant’s business activity for which the goods are acquired.
  4. Period dates to which the refund application relates.
  5. A declaration by the applicant that they have supplied no goods in the UK or EU member state of refund during the period of the application.
  6. The applicant’s VAT identification number or tax reference number and in the case of Northern Ireland, a UK VAT number with an ‘XI’ prefix.
  7. Bank account details including International Bank Account Number (IBAN) and Bank Identifier Code (BIC).

2.13 Standard fields for invoices or importations included in the refund application

  1. Name and address of the supplier.
  2. Except in cases of importation, the VAT identification number or tax reference number of the supplier.
  3. Except in the cases of importation, the XI Northern Ireland prefix or the relevant EU member state of refund prefix.
  4. Date and number of the invoice or importation document.
  5. Taxable amount and amount of VAT expressed in the currency of the UK or EU member state of refund.
  6. The amount of deductible VAT expressed in the currency of the UK or EU member state of refund. This is the amount of VAT recoverable taking account of any partial exemption restriction, and any restriction on the recovery of input tax applying in the UK or EU member state of refund.
  7. Where applicable the deductible proportion calculated in accordance with the rules applying in the EU member state of establishment.
  8. Nature of the goods acquired, described according to the following expenditure codes.

2.14 Expenditure codes

Code Expenditure
1 Fuel
3 Expenditure relating to means of transport
9 Expenditure on luxuries, amusements and entertainment
10 Other

The UK and EU member states may require further sub-codes to be used for each of the main expenditure codes, to the extent that such information is necessary due to any restrictions on the right to deduct in the UK or EU member state.

If code 10 is used without an accompanying sub-code, a narrative description of the goods must be provided.

Full details of expenditure codes required by the UK and EU member states can be obtained from its tax authority and may also be available through the electronic claim system.

2.15 Invoices that you may have to scan and submit electronically

The UK and EU member states may require invoices with a value of 1,000 euros or more (250 euros in the case of fuel), or the equivalent in national currency, to be scanned and submitted electronically with the application. All other invoices should be kept as they may be requested at a later date by the UK or EU member state of refund.

2.16 Language for the application

Free text fields will now have more choice of language to be used. Some EU member states allow the use of a second language with English being a common option.

Full details of languages required by the UK or member state can be obtained from its tax authority and may also be available through the electronic claim system.

2.17 Communication with applicants

You will be informed when the UK or EU member state:

  • forwards the application to the UK or EU member state of refund
  • receives the application
  • requires further information
  • makes its decision

It is essential that the email address provided on the application is correct and if this changes at any time before the application is decided, it must be amended at the earliest opportunity.

2.18 Method of payment

The payment will be made in the country of refund or, at the applicant’s request, in any other EU member state. In the latter case, any bank charges for the transfer will be deducted from the amount to be paid to the applicant.

If incorrect bank details are submitted by the claimant and this results in further bank charges being incurred, these may also be deducted from the amount payable on the current or subsequent applications. It is therefore extremely important that you make sure that the bank details you supply are absolutely correct.

2.19 Time limits for processing an application

The country of refund will notify you of the decision to approve or refuse the application within 4 months of the date that they first received the application.

If the country of refund requires additional information in order to process the application, it can request this from the applicant, the applicant’s tax authority, or a third party before the expiry of the 4 month period.

The additional information must be provided within one month of receiving the request.

Once the country of refund has received the additional information, it has 2 further months in which to notify its decision.

If further additional information is requested, the final deadline for making a decision can be extended up to a maximum of 8 months from the date they received the application.

Payment must be made within 10 working days following expiry of the appropriate decision deadline.

2.20 Correct an error on your application

If you discover an error on your application, a corrected application can be submitted. The correction procedure allows existing lines on the application to be amended or deleted (by reducing to ‘nil’) but does not allow new lines to be added. The correction procedure can also be used to amend incorrect bank details, email addresses and so on.

If an application is found to be incorrect any overpayment will be recovered, normally by deducting it from any refund due.

2.21 Penalties for errors on your application

The UK and EU member states take a very serious view of incorrect applications. Refunds obtained on the basis of any incorrect application can be recovered, penalties and interest may be imposed, and further refund applications suspended.

2.22 Application refusal

If the country of refund refuses an application, in full or part, they will also notify you of the reasons for refusal.

If this happens the applicant can appeal against the decision, using the appeals procedure of the country of refund. This means that the normal VAT appeals rules of that country on time limits, form of appeal and so on, will apply.

If the country of refund has not notified its decision within the appropriate decision deadline, you should consider that the application has been rejected unless any alternative procedures apply in that country.

The tax authority in your country cannot intervene on your behalf.

2.23 Interest

Interest may be payable by the country of refund to the applicant if payment is made after the final payment deadline.

This will be paid from the day following that deadline, up to the date the refund is actually paid.

The interest rate will be the same as that applied to refunds of VAT to taxable persons in that country under their national law.

If no interest is payable under national law for refunds, the interest payable will be the same as that charged by the country for late payments of VAT.

2.24. Refunds of VAT for Northern Ireland and EU businesses – Supplies of Services

Northern Ireland and EU businesses incurring VAT expenses on services, or on invoices containing both goods and services, cannot reclaim this VAT under the EU VAT refund system.

EU businesses will need to use the existing processes for refunding VAT to overseas businesses, see Notice 723A. Find out more about Northern Ireland businesses claiming VAT on services in the EU.

3. Refunds of VAT on goods for Northern Ireland businesses claiming from EU member states

Northern Ireland businesses can reclaim VAT paid on goods in EU member states from 1 January 2021.

How to make an application under the refund procedure

All applications must be submitted using the electronic online system. In order to be able to make an electronic application for refund of VAT you first need to register for VAT online services.

3.1 How to register for online services

You will need to have your VAT 4 Certificate of Registration and a copy of your last VAT Return to hand and follow the on-screen instructions.

An activation code will be mailed to the business address registered with HMRC within set time limits (currently 7 to 10 days). Once this is received you will have 28 days from the date of the letter to activate the service.

3.2 Appoint an agent

Agents can register to enable them to make refund applications on behalf of their clients and additional security procedures have been built in to their online application process. Find out more in appoint someone to deal with HMRC on your behalf.

As a security measure the activation code will be mailed to the business. The 28 days activation period will still apply therefore the business should forward the PIN to their agent in time for them to complete the activation process within 28 days, otherwise the PIN will expire, and the process will have to be repeated.

In order to preserve agent and client confidentiality, HMRC’s customer contact staff cannot discuss applications with an agent who does not provide the full application reference number. If no application reference is quoted, only the client can discuss that application with HMRC.

The claim form has been largely standardised but the EU member state of refund retains the ability to decide preferences such as language required for any free text areas. Some EU member states now accept more than one language with English being a common option.

3.3 Eligibility to claim

To be able to claim:

  • you must be a taxable person registered for VAT in the UK with an establishment in Northern Ireland
  • you must be identified as trading under the Protocol – to confirm eligibility see VAT registrations – selling or moving goods in Northern Ireland
  • your claims must be in relation to goods only and the invoice must contain only supplies of goods

If you are making supplies of services in Northern Ireland and you are not also trading under the Protocol, you cannot use the EU VAT refund system.

If you are in a UK VAT group, you can only use the EU VAT refund system for supplies that are received by members of the group that are established in Northern Ireland.

You must meet the following conditions:

  • you must not be registered, liable or eligible to be registered in the EU member state of refund
  • you must be identified as trading under the Northern Ireland ‘Protocol’
  • you must not have any fixed establishment, seat of economic activity, place of business or other residence in the EU member state of refund
  • during the refund period you must not have supplied any goods in the EU member state of refund with the exception of:

    • any goods where VAT is payable by the person to whom the supply is made

If you’re registered as a VAT group, and the group has member companies in the EU member state of refund, you may only use the refund scheme to claim VAT incurred by companies who are not established in, and do not make supplies in, the EU member state of refund

By submitting your application through HMRC you’re declaring that you meet these conditions.

3.4 Proof of taxable person status

Applications will be subjected to automated registration verifications by HMRC before being forwarded electronically to the EU member state from which the refund is being claimed.

Applications will only be forwarded to the EU member state of refund if these checks are satisfactory. If the checks are not satisfactory, the application will be rejected by the electronic portal and you will receive an appropriate error message.

Applicants that have cancelled their VAT registration must submit their applications as soon as possible from the date of cancellation.

For VAT group registrations, the application will be forwarded in the name of the representative member. Where the application relates to VAT incurred by other group members, it may be accompanied by a covering note explaining that these companies are members of the same VAT group. This note can be sent using the attachment facility for invoices (explained in paragraph 3.14), and may reduce requests for additional information from the EU member state of refund.

3.5 How to make a claim

A separate online application is required for each EU member state from which you wish to claim. In order to start an application, you must access the relevant online services section using your unique PID and password and enter your standard data into the required fields, along with invoice or importation details for expenditure you wish to reclaim.

You can start an application and save it if it’s not complete, you can then recall it for completion and submission at a later date. This facility is available for applications relating to each EU member state.

3.6 Application periods

The refund period must not be more than 1 calendar year or less than 3 calendar months (unless the period covered represents the remainder of a calendar year, for example, where interim applications have already been submitted earlier in the year covering more than 9 months, or if you have recently become VAT-registered).

Refund periods do not have to cover strict calendar quarters. For example, you may submit 2 applications covering 5 months each, and a final one covering 2 months. But some EU member states have their own requirements, and details of these can be obtained from the relevant tax authority.

Refund periods may not overlap. For example, you may not submit an application covering 1 January to 31 March and another for 1 March to 31 May. You may submit a further application covering the whole refund year after the year end. This enables you to claim for any purchases which you have missed in earlier periods.

3.7 Minimum amount for a claim

If the refund application relates to a period of less than a calendar year, but not less than 3 months the minimum amount claimable is 400 euros or the equivalent in national currency.

If the refund application relates to a period of a calendar year or the remainder of a calendar year the minimum amount claimable is 50 euros or the equivalent in national currency.

3.8 Invoices you can include in the application

Include in the application invoices relating to:

  • supplies of goods with a tax point during the period of the refund application
  • an importation of goods into the EU member state of refund during the period of the refund application

In addition, you may claim for invoices or imports not included in a previous application as long as they relate to the same calendar year.

The application must not include amounts of VAT that have been:

  • incorrectly invoiced
  • invoiced for goods sent to an EU member state or exported outside the UK and EU
  • incurred for non-business activities
  • invoiced with supplies of services

3.9 Information covered in the standard information fields

  1. Name.
  2. Electronic contact address (email address).
  3. Description of your business activity to which the goods and services to be claimed relates (the electronic portal will permit up to 3 business activities to be entered).
  4. Period of application.
  5. Declaration of eligibility to claim (in the UK making an application is considered to be the declaration).
  6. VAT registration number with the XI prefix.
  7. Specified bank account details to include IBAN and BIC.

3.10 Information required for invoices being claimed

  1. Name and address of your supplier.
  2. Except in cases of importation, the VAT identification number or tax reference number of the supplier and the prefix of the EU member state of refund.
  3. Date and number of the invoice or importation document.
  4. Taxable amount and amount of VAT expressed in the currency of the EU member state of refund.
  5. The amount of deductible VAT expressed in the currency of the EU member state of refund. This is the amount of VAT recoverable taking account of any partial exemption restriction, and any restriction on the recovery of input tax applying in the EU member state of refund.
  6. Where applicable, the deductible proportion calculated in accordance with the rules applying in the UK.
  7. Nature of the goods acquired, described according to the following expenditure codes:
Code Expenditure
1 Fuel
3 Expenditure relating to means of transport
9 Expenditure on luxuries, amusements and entertainment
10 Other

Many EU member states will require sub-codes in addition to the main expenditure codes, to the extent that such information is necessary due to restrictions on the right to deduct in those member states.

Where applicable, these sub-codes will appear as completion options on the electronic portal.

Where code 10 is used, without an accompanying sub-code, a narrative description of the goods or services must be entered in a free text box, using the language required by the EU member state of refund.

If an invoice includes items covering more than 1 expenditure code, the code relating to the highest proportion of expenditure is the one that should be used.

3.11 Restrictions for partial exemption

You must apply the appropriate recovery rate for the goods purchased against each invoice or importation on your application and show the amount of VAT recoverable in the appropriate box.

The recovery rate to be applied is the last percentage appropriate to the refund period covering the invoice date. For example, if the claimable percentage for the March 2022 period is 5% and the application is submitted in April before the annual adjustment is calculated, the claim should be restricted to 5%.

If you only make 1 application at the year end and have already calculated that the annual adjustment covering the March 2022 quarter is 3%, then you may only claim 3%.

Following your annual adjustment, you will not be required to amend refund applications already submitted. The invoices can only be entered once and the percentage to be used is that covering the invoice date.

3.12 Restrictions for non-business expenses

Expenditure incurred in an EU member state that relates to non-business activities is not claimable under the refund scheme.

3.13 Language for the application

EU member states generally require the application to be in their own language but with effect from 1 January 2010 they may allow the use of a second language in the free text fields, and English is a common option. The language required by the EU member state of refund will be displayed on the electronic portal as you complete the application.

3.14 Invoices that you may have to scan and submit electronically

Subject to the rules of the EU member state of refund you may be requested to submit invoices with values of 1,000 euros or more (250 euros or more in the case of fuel), or the equivalent in national currency, with the application. All other invoices should be retained as they may be requested at a later date by the EU member state of refund.

If you have imported goods, you must have the VAT copy of the import entry or other customs document showing the amount of VAT that you have paid.

The documents must be scanned and saved as files of PDF, TIFF, or JPEG format, and the total attachment size for each application must not exceed 5 megabytes. To keep your attachment size within this limit, you should scan the documents at the lowest resolution that still provides a legible copy, and you may include the document files in a ‘zip’ file. You cannot include ‘zip’ files within ‘zip’ files.

Where the UK tax authorities receive an attachment larger than 5 megabytes, containing ‘zip’ files within ‘zip’ files, or infected by a virus, they will remove and destroy the attachment. They will notify you if this happens.

3.15 Updates on your application

You will be informed electronically:

  • if your application fails basic validation checks by the electronic portal (by an error message)
  • when HMRC forwards your application to the EU member state of refund
  • when the EU member state of refund receives the application
  • if the EU member state of refund requires additional information from you
  • when the EU member state of refund makes its decision

It is essential that the email address you provide is correct and if this changes at any time before the application is decided, it must be amended at the earliest opportunity using the application correction procedures.

3.16 Time limits for submitting applications

Applications must be submitted to HMRC at the latest by 30 September of the calendar year following the refund year and will only be considered submitted if the applicant has completed all of the required standing data fields.

For VAT paid on goods in the EU from 1 January 2021 to 31 December 2021, the deadline for submitting claims is 30 September 2022. Properly completed applications will be forwarded to the EU member state of refund who will be responsible for deciding the application.

3.17 Time limits to process the application by the EU member state of refund

The EU member state of refund must notify the applicant of its decision to approve or refuse the application within 4 months of the date they first received the application.

Where the EU member state of refund requires more information in order to decide the application, this will be requested by electronic means either from the claimant, from the competent authorities of the UK, or from third parties. Any request for additional information must be made within the 4-month period.

Where additional information is requested it should be supplied within one month of the date on which the request reaches the person to whom it’s addressed.

Once the EU member state of refund has received the additional information, it has a further 2 months in which to notify its decision.

If further additional information is requested by the EU member state of refund, the final deadline for making a decision can be extended up to a maximum of 8 months from the date they received the application. Payment must be made within 10 working days following expiry of the appropriate decision deadline.

3.18 How your claim will be paid

The refund will be paid in the EU member state of refund or, at the applicant’s request, in the UK or an EU member state. In the latter case, any bank charges for the transfer will be deducted by the EU member state of refund from the amount to be paid to the applicant.

If incorrect bank details are submitted by the claimant and they result in further bank charges being incurred, these will also be deducted from the amount payable on the current or subsequent applications. It is extremely important that you make sure that the bank details you supply are correct. If you change bank accounts whilst an application is pending you must make sure that these details are amended.

3.19 Correct an error on your application

The electronic portal provides a correction facility whereby you can recall the original application and amend existing details (including contact and bank details) and invoice lines. You may reduce an existing line to ‘nil’ (effectively deleting it) or substitute new invoice details for the existing ones – you cannot add new lines.

3.20 Penalties for errors on your application

The UK and EU member states take a very serious view of incorrect or false applications. Refunds claimed incorrectly on the basis of incorrect or false information can be recovered, and penalties and interest may be imposed, and further refund applications suspended.

HMRC will not be able to intervene, this is a matter for the EU member state of refund. If your application is found to be incorrect after the refund has been paid, any over payment will be recovered, normally by deducting it from any subsequent refund.

3.21 Application refusal

If the EU member state of refund refuses an application in full or in part, they must also notify you of the reasons for refusal.

If this happens you can appeal against the decision using the appeals procedure of that EU member state. This means that the normal VAT appeals rules of that EU member state on time limits, form of appeal and so on, will apply.

If the EU member state of refund has not notified its decision within the appropriate decision deadline, you should consider that the application has been rejected unless any alternative procedures apply in that EU member state. HMRC cannot intervene on your behalf.

3.22 Interest if the payment is delayed

Interest may be payable to you by the EU member state of refund if payment is made after the deadline.

If applicable, it will be paid from the day following the deadline up to the date the refund is actually paid.

Interest rates must be the same as those applied to refunds of VAT to taxable persons established in the EU member state of refund under the national law of that EU member state.

If no interest is payable under national law for refunds to established taxable persons, the interest payable will be equal to the interest or equivalent charge which is applied by that EU member state for late payments of VAT by taxable persons.

4. Reclaim VAT expenses on services received in EU member states

Northern Ireland businesses that incur VAT on services received in EU member states or submit claims with invoices for both goods and services, cannot claim the VAT using the EU electronic system for VAT refunds.

When making VAT claims in any EU member state, you must make sure this does not include VAT expenses on services. EU member states will not refund VAT on services under the EU VAT refund scheme. Any VAT claims relating to services will be rejected.

VAT expenses on services must be reclaimed using the existing processes for non-EU businesses. This process varies across the EU. You will need to follow the procedure set out by the country from which you’re making the claim.

You can find further information about claiming VAT refunds from EU countries on the EU Commission’s website.

5. Refunds of VAT on goods supplied in Northern Ireland to EU businesses

Who can apply

You must be a taxable person established in an EU member state and you are claiming VAT expenses on goods only with the invoice showing only supplies of goods. Find out more if your claims relate to VAT incurred on services in Northern Ireland.

You must meet the following conditions:

  • you must not be registered, liable or eligible to be registered in the UK
  • you must not have any place of business in the UK or in the Isle of Man
  • you must not make any supplies in the UK If you use an agent to submit your application or receive payment of refunds on your behalf, you must submit a letter of authority, in hard copy, to the UK Overseas Repayment Unit – an acceptable form of words for the letter of authority is given at paragraph 5.5 of Notice 723A
  • the goods must be located in Northern Ireland when they are supplied

5.1 Submit your application

You must submit your application through the electronic facility provided by the tax authority in your own EU member state. For more information about this facility you should contact your own tax authority.

5.2 Application periods

The period covered by your application is known as the ‘refund period’. This must not be more than 1 calendar year or less than 3 calendar months (unless it covers the remainder of a calendar year, for example, where applications have already been submitted covering more than 9 months).

Refund periods do not have to cover strict calendar quarters. For example, you may submit 2 applications covering 5 months each, and a final one covering 2 months. Refund periods may not overlap. For example, you may not submit an application covering 1 January to 31 March, and another for 1 March to 31 May.

You may submit a further application covering the whole of the refund year after the year end. This enables you to claim for any purchases or imports which you have missed in earlier periods.

5.3 Time limits for submitting an application

Your application must be submitted through the electronic facility in your own EU member state, at the latest by 30 September of the year following that in which the VAT was incurred. So, for VAT incurred from 1 January 2021 to 31 December 2021, you must submit your application by 30 September 2022.

5.4 Claim limits

There is no maximum limit.

The minimum limits are:

  • £295 where the application covers less than a calendar year but not less than 3 calendar months
  • £35 where the application covers a calendar year or the remainder of a calendar year

5.5 Goods you can and cannot claim VAT on

You can claim VAT on goods purchased in Northern Ireland during the refund period, and VAT on goods imported into Northern Ireland during the refund period.

You cannot claim:

  • amounts of VAT that have been incorrectly invoiced, or where VAT has been charged on the dispatch of goods to Northern Ireland or another member state, or the export of goods outside the Northern Ireland or EU (you must take this up with the supplier)
  • VAT on the purchase of a motor car
  • VAT on goods used for business entertainment – as an exception, VAT on entertainment for overseas customers may be reclaimed but only if it is of a very basic nature
  • VAT on goods used for non-business activities
  • VAT on goods that were supplied to you in Great Britain (England, Scotland and Wales)

5.6 If you make both taxable and exempt supplies

You must apply the appropriate restriction to the VAT you reclaim, following the rules that apply in your own EU member state.

If your own EU member state operates the ‘pro-rata’ system for taxable and exempt supplies, and your pro-rata rate changes from one year to the next, you should submit a pro-rata adjustment through your tax authority’s electronic facility.

5.7 Information you must show on your application

The electronic facility provided by your tax authority will contain fields for completion, and you should direct any detailed queries about input of data to the facility to your tax authority.

As a guide, the following information is required on each refund application:

  • your name and address
  • an address for contact by electronic means (an email address)
  • a description, using NACE codes, of your business activity for which you have purchased the goods
  • the start and end dates of the refund period covered by the application
  • a declaration that you have not made any supplies of goods in the Northern Ireland and in the UK during the refund period
  • your VAT identification number or tax reference number
  • your bank details including your IBAN and BIC

In addition, you must provide the following details for each purchase or importation included in your application:

  • the name and full address of the supplier
  • the VAT registration number of the supplier in Northern Ireland, including the prefix ‘XI’ (except in the case of imports)
  • the date and number of the supplier’s invoice or the importation document
  • the taxable amount and the amount of VAT on the invoice, expressed in pounds sterling
  • the amount of VAT deductible for the purchase or importation, expressed in pounds sterling
  • where applicable under the rules of your EU member state, the appropriate pro-rata rate
  • a description of the goods purchased, or goods imported, using the codes in paragraph 5.8

5.8 Codes and sub-codes for goods required on refund applications

The following text has the force of law.

Use the codes in this section to describe the nature of the goods to reclaim.

Code 1: Fuel

Sub-code: 1.6 Fuel purchased for resale

Code 2

Code not in use

Code 3: Expenditure relating to means of transport (other than goods codes 1)

Sub-codes:

  • 3.2 Expenditure relating to means of transport with a mass less than or equal to 3,500kg other than means of transport for paying
    • 3.2.1 Purchase of means of transport with a mass less than or equal to 3,500kg other than means of transport for paying passengers
    • 3.2.3 Purchase of accessories for a means of transport with a mass less than or equal to 3,500kg other than means of transport for paying passengers
  • 3.4 Expenditure relating to means of goods transport
    • 3.4.1 Purchase of a means of goods transport
  • 3.9 Purchase of passenger car of ‘M1’ category
  • 3.10 Purchase of accessories for passenger cars of ‘M1’ category

Code 4

Code not in use

Code 5

Code not in use

Code 6

Code not in use

Code 7

Code not in use

Code 8

Code not in use

Code 9: Expenditure on luxuries, amusements and entertainment

Sub-codes:

  • 9.1 Purchase of alcohol
  • 9.2 Purchase of manufactured tobacco
  • 9.4 Expenditure on maintenance of pleasure craft if not services
  • 9.5 Expenditure on works of art, collectors’ items and antiques
  • 9.7 Expenditure on luxuries, amusements and entertainment other than 9.1, 9.2 and 9.3 if not services

Code 10: Other

Where you have entered code 10, with no accompanying sub-code, you must provide a free text description of the goods or services in English.

Sub-codes:

  • 10.1 Tools
  • 10.5 Purchase of property
    • 10.5.1 Purchase of immoveable property
    • 10.5.2 Purchase of immoveable property used as a dwelling
    • 10.5.3 Purchase of moveable property other than code 2
  • 10.6 Provision of water, gas or electricity through a distribution network
  • 10.7 Gifts of a small value
  • 10.8 Office expenses
  • 10.10 Flat rate additions on livestock and agricultural produce
  • 10.13 Goods acquired by a travel organiser for the direct benefit of the traveller
  • 10.14 Goods purchased for resale other than 1.6

5.9 Scanned documents you must send with your application

You must attach scanned copies of all invoices and import documents. Where the taxable amount exceeds £200 in the case of fuel, £750 in the case of all other goods and services.

The documents must be scanned and saved as files of PDF, TIFF or JPEG format, and the total attachment size per application must not exceed 5 megabytes. In order to keep your attachment size within this limit, you should scan the documents at the lowest resolution that still provides a legible copy, and you may include the document files in a ‘zip’ file. You cannot include ‘zip’ files within ‘zip’ files.

Where the UK tax authorities receive an attachment larger than 5 megabytes, containing ‘zip’ files within ‘zip’ files, or infected by a virus, they will remove and destroy the attachment. They will notify you if this happens.

To prevent this happening, if the attachment size would exceed 5 megabytes, remove lower value invoices to reduce the attachment size to an acceptable limit for submitting. If we require copies of further invoices, we will ask for them separately.

The UK recommends TIFF or PDF format at 200 DPI.

5.10 After you have submitted your application

The UK tax authority will notify you of the date on which it received your application. Within 4 months of that date, the UK tax authority will advise you whether your application has been accepted, partly or wholly rejected, or further information is required.

If the UK tax authority requests further information (which may take the form of original invoices or other documents), you must supply this within one month of the date on which you receive the request. The UK tax authority will then have a maximum period of 8 months from the date it received your application, to notify you of its decision.

5.11 When you will receive payment

Unless your application has been wholly rejected, you will receive payment of any amount due to you within 10 working days of the decision deadlines set out in paragraph 5.10. Payment will be made in pounds sterling, to the bank account detailed in your application, so it is important that the account details are correct.

5.12 Interest if the payment is made late

Where the UK tax authority fails to make payment to you by the deadlines set out in paragraph 5.11 (and provided you have supplied any additional information requested within the required timescales) you will be paid interest. Interest will be calculated at the same rate applied to taxable persons within the UK, and the interest calculation period will run from the date payment was due until the date it is made.

5.13 Application refusal

Your application can be refused but we will tell you why we have refused it.

If you do not agree with the decision to refuse your application, you can either:

  • ask for the decision to be reviewed by an HMRC officer not previously involved in the matter
  • appeal to an independent tribunal

If you opt for a review you can still appeal to the tribunal after the review has finished.

If you want a review you should write to the address given in the decision letter within 30 days of the date of the letter, giving your reasons why you do not agree with the decision. We will not take any action to collect the disputed tax while the review of the decision is being carried out.

If you want to appeal to the tribunal you should send them your appeal within 30 days of the date of the decision letter.

You can find further information about appeals and reviews.

5.14 Correct an application after it’s been submitted

The UK will accept corrected applications, but you should seek advice from your tax authority about how these should be submitted through the electronic facility in your own EU member state.

The UK may impose penalties for applications which are found to be incorrect, so if you realise that you have made an error on an application after it has been submitted, you should submit a correction as soon as possible.

You can use the correction procedure to amend existing claim lines, you cannot delete a claim line but you can reduce the VAT value to zero, and you may not insert additional lines. If you have missed an invoice from an application, you should include it on a later one. You should also use the claims procedure to amend your email address or bank details, if these change after you have submitted your application.

Corrected applications must be submitted by the same deadline as original applications, that is by 30 September of the year, following the year in which the VAT was incurred.

6. Refunds of VAT on services in the UK for EU businesses

If you incur VAT on services in Northern Ireland you cannot reclaim the VAT using the EU refund system and if you submit claims relating to services or submit claims with invoices for both goods and services, they will be rejected. You can claim VAT relating to services using the overseas repayment scheme.

More information about the scheme is available in Notice 723A.

Published 31 December 2020
Last updated 14 June 2021 + show all updates
  1. We have added the expiry date of 31 March for submitting claims for VAT refunds in EU member states where VAT was incurred before 31 December. Under section 3.3 we have added a link to more information on how to be registered for VAT and identified as trading under the Protocol.

  2. Sections 'what this guidance is about' and 'codes and sub-codes for goods required on refund applications' have been updated.

  3. Updated information on who can apply.

  4. First published.