Reclaim VAT you’ve paid on goods and services bought in the UK on or before 31 December 2020.
Following the UK’s exit from the EU on 31 January 2020, the UK entered into a transition period until 31 December 2020. During this period, EU businesses that incurred VAT on expenditure in the UK before the end of the transition period can still make a claim under the provisions of Part 20 of the VAT Regulations 1995 (SI 1995/2518) subject to the terms of the Withdrawal Agreement.
From 1 January 2021, EU businesses that pay VAT on expenses in the UK will be required to make a claim under the provisions of Part 21 of the above regulation.
Claims to be considered for refund based on the Withdrawal Agreement
The following claims are covered by the Withdrawal arrangements:
- claims made on or after 31 December 2020 which relate to VAT incurred on expenses for 1 January 2020 to 31 December 2020
- claims that have been submitted before 31 December 2020 which are still being processed and yet to be refunded as at 31 December 2020
Who can apply
You must be a taxable person established in a member state of the EU and meet the following conditions:
- you must not be VAT-registered in the UK and you do not have to be, or cannot be, VAT-registered here
- you must not have a place of business or other residence in the UK or the Isle of Man
- you must not make any supplies in the UK, apart from:
- transport services related to the international carriage of goods
- goods and services where the person you’re supplying pays VAT on them
Who can claim
Claims can be made by you or your accountant or agent if they have a letter of authority to act for you.
What can be reclaimed
You can reclaim VAT for most goods and services bought in the UK for your business including:
- accommodation and meals
- trade fairs
- travel costs
- 50% of the VAT charged for hiring or leasing a car
- other goods and services you buy and use in the UK
What cannot be reclaimed
VAT cannot be reclaimed on the cost of buying a car, or for goods and services:
- bought for resale
- used for business entertainment
- used for non-business activities
If your business makes both taxable and tax exempt supplies you may not be able to reclaim all of the VAT you have paid.
Reclaiming VAT on goods bought outside the UK
If you import goods into the UK and you’re going to use them in your business you may have to pay VAT on them in the UK. You can use the refund scheme to reclaim the VAT you’ve paid on these imports unless you either:
- get some other VAT relief when you import the goods
- have to register for VAT in the UK because you have imported the goods
How to claim
You claim by completing an online form supplied by the tax authorities in your own country. They send it to HMRC to consider your claim.
Your application must be submitted by 31 March 2021 for VAT incurred from 1 January 2020 to 31 December 2020.
There is no maximum limit. The minimum limits for UK claims are:
- £295 for claims for period between 3 and 12 calendar months
- £35 for claims for a whole calendar year, or the remainder of a calendar year if this is less than 3 months
Evidence needed for claims
You must attach copies of all invoices to your application form if the amount of any invoice is equal to or exceeds:
- £200 for fuel bought
- £750 for all other supplies
You do not need to send any paper invoices or other documents to HMRC to support your claim. But you must keep the originals of all invoices, whatever the amounts, as HMRC may ask for them when authorising your claim.
Timescales and payment
HMRC has to deal with your claim within specified time limits:
|Time since HMRC received your claim||What HMRC must do|
|Within 4 months||Send you a decision about your claim. If a decision cannot be made more information can be requested from you. You must provide it within 1 month|
|Within 4 months and 10 days||Pay your VAT refund if no further information has been requested from you|
|Within 8 months||Make a final decision about your claim if more information was requested and you sent it within 1 month|
|Within 8 months and 10 days||Pay your VAT refund if further information has been requested and you provided it within 1 month|
If a refund is due and not paid within these timescales you will be entitled to interest on the amount of the refund. This will be calculated and paid by HMRC.
Refunds will be paid by credit transfer to your bank, in pounds sterling.
If your claim is refused HMRC will tell you why. If you do not agree with HMRC’s decision, you can either ask HMRC to review the decision, or you can appeal to an independent tribunal within 30 days of the date of the decision.
Incorrect or false claims
HMRC is able to recover any refunds obtained on the basis of any incorrect application. You may also be charged a penalty for sending in an incorrect claim.
False claims are treated very seriously and have serious financial consequences including repayment of the amount falsely claimed plus penalty amounts.
Claims for refunds from 1 January 2021
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