Guidance

Refunds of UK VAT for non-UK businesses or EU VAT for UK businesses (VAT Notice 723A)

Find out how to claim a VAT refund in the UK if you're established outside the UK, or how to claim back EU VAT if you're established in the UK or Isle of Man.

Detail

This notice cancels and replaces Notice 723A (October 2012).

This notice applies to supplies made on or after 1 January 2021, the day after the end of the Transition period.

Find out about supplies made in Northern Ireland on or after 1 January 2021.

1. Overview

1.1 What this notice is about

This notice explains how UK and Isle of Man businesses can claim a refund of VAT incurred in the European Union (EU) and how businesses established in countries outside of the UK can reclaim VAT incurred in the UK.

1.2 Laws that cover this notice

UK law:

  • Value Added Tax Act 1994, Section 39
  • VAT Regulations 1995 (SI 1995/2518) Parts XX & XXI
  • The VAT (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (SI 2020/1495) Part 3

1.3 Isle of Man

For VAT purposes, the Isle of Man is treated as part of the UK. VAT is chargeable in the Isle of Man under Manx legislation, which is broadly similar to UK legislation. The schemes described in this notice apply equally to refunds of VAT incurred in the Isle of Man. Any references to the UK in this notice are to be taken to include the Isle of Man.

2. How UK and Isle of Man businesses can claim EU VAT

VAT incurred on or before 31 December 2020

From 1 April 2021 UK businesses no longer have access to the EU electronic portal. The deadline for claiming VAT incurred on expenses in the EU on or before 31 December 2020 was 31 March 2021.

VAT incurred on or after 1 January 2021

UK and Isle of Man businesses can still claim refunds of VAT from the EU after the end of the transitional period but they will have to use the existing processes for non-EU businesses. This process varies across the EU so you will need to follow the procedure set out by the country from which you’re making the claim. UK businesses may need to provide a certificate of status to get a refund.

Get more information about claiming VAT refunds from EU countries on the EU Commission’s website.

Check how to claim VAT refunds in Northern Ireland or the EU, if you’re established in Northern Ireland or in the EU.

3. Refunds of UK VAT for businesses established outside the UK

What this scheme is for

If you’re registered for business purposes in a country outside the UK and you buy goods or services in the UK, you may have to pay VAT. This need not happen if you buy goods for export, but it may apply if what you buy is used in the UK. For example, if you take part in a trade fair.

If you’re not registered for VAT in the UK you cannot treat this VAT as input tax, but you may be able to use this scheme to reclaim VAT charged on imports into the UK or purchases of goods and services used in the UK. For VAT purposes the Isle of Man is treated as part of the UK. VAT is chargeable in the Isle of Man under Manx legislation which is broadly similar to UK legislation. This scheme applies equally to refunds of VAT incurred in the Isle of Man. Any references to the UK in this notice are to be taken to include the Isle of Man.

3.1 Who can apply

If you’re registered for business purposes in a country outside the UK, you can use the scheme to reclaim VAT paid in the UK, provided that you:

  • are not registered, liable or eligible to be registered for VAT in the UK, you’ll find more about this in Notice 700/1: who should register for VAT
  • have no place of business or other residence in the UK and do not make any supplies in the UK (other than transport services related to the international carriage of goods, or supplies where VAT is payable by the person in the UK to whom the supply is made)

It is a condition of the scheme that your own country allows similar concessions to UK traders in respect of its own turnover taxes, but your application will only be refused on these grounds if your own country has a scheme for refunding these taxes, but refuses to allow UK traders to use it.

If you are an EU business and your claim relates to VAT on expenditure incurred on goods only in Northern Ireland on or after 1 January 2021, refer to claim VAT refunds in Northern Ireland or the EU, if you’re established in Northern Ireland or in the EU.

3.2 Goods and services you can and cannot reclaim VAT on

During the refund period you can claim VAT on:

  • goods and services purchased
  • goods imported into the UK

You cannot use the scheme to reclaim VAT on:

  • non-business supplies, but if a supply covers both business and non-business use, VAT can be reclaimed on the business element of the supply
  • any supply used or to be used to make a supply in the United Kingdom
  • the supply or importation of most ordinary business cars, only 50% of the VAT incurred on the hire of lease of a car for mixed business and private purposes is allowed
  • certain second-hand goods, such as cars and antiques for which no tax invoice will be issued
  • business entertainment or hospitality expenses, as an exception, VAT on entertainment for overseas customers may be reclaimed but only if it is of a very basic nature
  • export of goods, but these will be zero-rated, provided the supplier has the necessary evidence
  • goods and services, such as hotel accommodation, you have bought for resale which are for the direct benefit of travellers
  • any supply used or to be used to make an exempt supply outside the United Kingdom, (for this purpose an exempt supply is a supply described as exempt in Schedule 9 to the VAT Act 1994, whether or not the place of the supply is in the UK)
  • goods in Northern Ireland that could be claimed under the Northern Ireland protocol

There is also a VAT Retail Export Scheme which allows non-EU visitors a refund of VAT on certain goods that they buy in Northern Ireland. For more details of the Scheme see guidance on the Retail Export Scheme (Northern Ireland) – Notice 704.

3.3 Partial exemption

In most cases, where goods and services are used to make both taxable and exempt supplies you can only recover VAT to the extent that they are used to make taxable supplies. For further information see Notice 706: partial exemption.

3.4 VAT paid on imports

If you’re importing goods into the UK you can reclaim any VAT due, provided there is no other VAT relief available at import. But you’ll not be able to use the scheme if, as a result of importing the goods, you become liable to register for VAT in the UK. Find out about paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland.

3.5 Claim limits

There is no maximum amount you can claim but the UK has set minimum claim amounts that can be refunded. Your application should cover any VAT you’re reclaiming over a period of at least 3 months but not more than the full prescribed year.

When your application is for a period covering less than 12 months the total amount of VAT claimed must not be less than £130.

The application can cover less than 3 months if this is all that remains of the prescribed year. In that case, or when the application is for the full 12 months of the prescribed year, the amount of VAT claimed must not be less than £16.

You can also include items missed on earlier applications as long as they related to VAT charged in the year of the application.

3.6 Time limits for making an application

You must make any claim no later than 6 months after the end of the ‘prescribed year’ in which you incurred the VAT.

The prescribed year is the 12 months from 1 July to 30 June of the following calendar year, so you must make your application no later than 31 December.

To make sure fair treatment for all claimants, applications are dealt with on a ‘first come, first served’ basis and the time limit is applied strictly.

3.7 How businesses established outside the UK can claim refunds of UK VAT

3.7.1 Application form

You make your application on form VAT 65A.

The following statement has the force of law.

Applications by non-UK businesses for refunds of VAT incurred in the UK (under the terms of VAT Regulations 1995 SI 1995/2518 section 191(1) (a)) may be made on form VAT 65A and must contain the information requested on that form.

The legislation also permits use of a similar form if it is produced by an official authority and contains the same information and declaration set out in the VAT 65A.

3.7.2 Certificate proving your business activity

When you make your first application you must also include a certificate from the official authority in your own country showing that you’re registered for business purposes in that country.

When you apply for the certificate, make sure you ask for it to show all the information that the UK authorities will need to process your application. For example, if the invoices are made out in your company’s trading style, the certificate must show this as well as the name of the person registered.

The certificate must contain:

  • the name, the address and official stamp of the authorising body
  • your own name and address (see paragraph 3.7.4 if you have a PO Box address)
  • the nature of your business
  • your business registration number

It must be an original certificate, a photocopy is not acceptable.

You may use form VAT 66A.

The following statement has the force of law.

The certificate of status for non-UK businesses required under the terms of VAT Regulations 1995 SI 1995/2518 section 191(1)(b)(i) may be made on form VAT 66A and must contain the information requested on that form. The legislation also provides for use of a similar form if it is produced by an official authority and contains the same information set out in the VAT 66A.

3.7.3 Submitting an electronic certificate

We will accept electronic certificates of status (e-CoS) if they’re issued by the official authority in your country of establishment, and the official authority has an online validation system that HMRC can access to verify that you’re in business.

We cannot accept e-CoS electronically so you must submit a copy of the e-CoS with your paper refund application.

3.7.4 Business address

This is the address where the business is established, for example, the place of its central administration and where the general policy and day to day running of business activities takes place. A postal or mailing address is not a business address.

We are aware that in some regions the address of a business establishment can include a PO Box because not all the roads and buildings are numbered.

Where we have received a certificate of status and it is unclear if the address is that of a business establishment, or a mailing address, we will ask for documentary evidence to establish that this is the place where your business is established.

3.7.5 Length of the certificate

Each certificate is valid for 12 months from its date of issue. It will cover any applications you make during that year. Once the certificate has run out, you’ll need to send a new one with your next application.

3.7.6 Proof that you’ve paid VAT

You must have correctly completed invoices, vouchers or receipts from your suppliers showing:

  • an identifying number
  • your supplier’s name, address and VAT registration number
  • your name and address
  • details of goods or services supplied
  • the date of supply
  • the cost of the goods or services (excluding VAT)
  • the rate of VAT
  • the amount of VAT charged

If the value of a supply is £250 or less (including VAT), the invoice need only show:

  • your supplier’s name, address and VAT registration number
  • the date of supply
  • details of goods or services supplied
  • the cost of the goods or services (including VAT)
  • the rate of VAT

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.

You must provide the originals of all invoices and import documents with your application. Copies are not acceptable.

3.7.7 Who can apply

You can prepare and send in your own application or have this done by an agent. Your agent will need either a Power of Attorney or letter of authority before acting for you, and to receive money on your behalf.

Example – format of a letter of authority acceptable to customs

‘I (name and address of claimant) hereby appoint (name and address of agent) to act on my behalf in connection with any application I make to the Commissioners of HMRC under the Value Added Tax Regulations 1995 as from time to time amended or replaced. Any repayment of VAT to which I am entitled pursuant to any such application made on my behalf by my above named agent shall be paid to (name and address of payee).

Date signed (by the claimant)’

3.7.8 When your refund will be paid

The refund will be made within 6 months of receiving a satisfactory application. If your application is in order, the invoices showing that you have paid the VAT will be returned to you as soon as your application is authorised for payment. If you have a query about an application you have made contact the UK VAT Overseas Repayment Unit.

If your application is found to be incorrect after the refund has been paid, any overpayment will normally be deducted from your next refund.

HMRC may charge penalties for incorrect applications. If you have made an error, you should submit a correction as soon as possible.

We take a very serious view of false applications. Refunds obtained by means of a false application can be recovered, and penalties may be imposed.

3.7.9 Method of Payment

Payment can be made directly to your own bank through either:

  • SWIFT (Society for Worldwide Inter-Bank Financial Telecommunications)
  • to a UK bank
  • by payable order in sterling directly to yourself or to your appointed agent

As payment by SWIFT is faster, less expensive and more secure, you’re encouraged to use this method of payment. If you opt for payment by SWIFT you must make sure that you provide the following information, together with a copy of a bank credit slip:

  • bank account number
  • currency of account
  • bank identification code
  • bank account name
  • bank name
  • bank address

Payments to bank accounts will be made in pound sterling. If you opt for payment by payable order you should cash it at your own bank. Payable orders are computer generated and, unlike cheques, they’re not signed. They should not be returned to HMRC for encashment.

3.7.10 Application rejected

If your application is rejected, we’ll tell you the reasons why.

If you do not agree with the decision, 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
  • give 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 get more information about appeals and reviews.

4. Refunds of UK VAT for EU businesses incurred on or before 31 December 2020

From 1 April 2021 EU businesses will no longer be able to reclaim UK VAT using the EU electronic portal, as the deadline for these claims was 31 March 2021.

4.1 After you have submitted your application

HMRC will tell you the date your application was received. Within 4 months of that date, we will tell you if your application:

  • is accepted
  • is partly or completely rejected
  • needs more information

We may ask for more information, such as original invoices or other documents. You must supply this within 1 month of the date on which you receive the request.

From the date we received your application, we will have up to 8 months to tell you of our decision.

4.2 When you will receive payment

Unless your application has been rejected, you will receive payment within 10 working days of the decision deadlines set out in paragraph 4.1. Payment will be in pound sterling and paid into the bank account given in your application.

4.3 Interest if the payment is made late

You will be paid interest if HMRC does not make payment by the deadlines set out in paragraph 4.2 (and provided you have supplied any additional information requested within the required timescales).

Interest will be calculated at the same rate applied to taxable persons within the UK. The interest calculation period will be from the date payment was due until the date it is made.

4.4 Application rejected

If your application is rejected, HMRC will tell you the reasons why.

If you do not agree with the decision, 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
  • give 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 more information about appeals and reviews.

4.5 Annual adjustment for previous claims

If you need to adjust a claim made before 31 March 2021 due to your annual adjustment, you must include the adjustment in a claim made under section 3.

If you are not making a claim under section 3 by 31 December 2021 and the adjustment means you have received an overpayment of VAT, you must inform HMRC by submitting the VAT 65B by 31 December 2021.

HMRC will then contact you to provide details of how to pay back the overclaimed VAT.

Your rights and obligations

Read Your Charter to find out what you can expect from HM Revenue and Customs and what we expect from you.

Help us improve this notice

If you have any feedback about this notice, email: customerexperience.indirecttaxes@hmrc.gov.uk. You will need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

If you need general help with this notice or have another VAT question you should phone our VAT helpline or make a VAT enquiry online.

Putting things right

If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right. If you’re still unhappy, find out how to complain to HMRC.

How HMRC uses your information

Find out how HMRC uses the information we hold about you.

Published 31 December 2020
Last updated 4 June 2021 + show all updates
  1. Information about the rules for claiming VAT has been added to section 3.2 and section 4 has been updated with information about refunds for EU businesses incurred on or before 31 December 2020.

  2. Sections 2, 3.1, 3.3, 3.4 and 4.6 have been updated and section 4.9 has been added to the guide.

  3. Updated information on the law that relates to this guidance.

  4. First published.