Business tax – guidance

VAT: EU businesses buying in the UK and the VAT refund scheme

Use the VAT refund scheme to reclaim VAT paid on goods and services bought in the UK if you’re an EU VAT registered business.

Overview

VAT is payable on most goods and services you buy in the UK. If your business is VAT registered in your own European Union (EU) country you may be able to use the VAT refund scheme.

Eligibility

You can use the scheme if all of the following apply:

  • you’re registered for VAT in an EU country
  • you’re not VAT-registered in the UK and you don’t have to be, or can’t be, VAT-registered here
  • you don’t have a place of business or other residence in the UK
  • you don’t 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

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 can’t be reclaimed

VAT can’t 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 EU

If you import goods into the UK from outside the EU 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

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.

How to claim

You claim by completing an online form supplied by the tax authorities in your own country. They send it to HM Revenue and Customs (HMRC) to consider your claim.

Time limits

You must claim no later than 9 months after the end of the calendar year the VAT was paid. If you miss the deadline you won’t be able to claim for that year. Your claim can’t be for:

  • more than a calendar year
  • less than 3 months unless that’s all that’s left of the calendar year

Claim limits

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 scan invoices and attach the scans to your claim if the amount of any invoice is equal to or exceeds:

  • £200 for fuel bought
  • £750 for all other supplies

You don’t 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 16 days Send you an email confirming receipt of your claim is sent to you.
Within 4 months Send you a decision about your claim. If a decision can’t 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.

Refused claims

If your claim is refused HMRC will tell you why. If you don’t agree with HMRC’s decision, you can either ask HMRC to review the decision, or you can appeal to an independent tribunal.

Incorrect or false claims

If your claim is not complete or accurate, HMRC will usually deduct any overpayment from your next refund or ask you to repay the overpaid amount. 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.