Refunds of UK VAT for non-EU businesses

Refunds of UK VAT for non-EU businesses

In May 2018, HMRC changed its “operational procedures” for processing claims for VAT from non-EU businesses. HMRC did not announce the change, and this resulted in difficulties for businesses applying for refunds. From 23 May 2018, claims for refunds were rejected mainly because they were not supported by a “Certificate of Status” that meets the full legal requirements in the UK.

The UK legislation, Regulation 191 of the Value Added Tax Regulations 1995 SI 1995/2658, allows HMRC to set out the requirements in a notice. The Notice is VAT Notice 723A: Claim back VAT paid in the EU if you’re established elsewhere, which contains much the same guidance as the version published in 2016, and possibly earlier. The change made in May 2018 seems to have been to apply more strictly the requirements of the law.

To be eligible to make a claim a business from a non-EU business has to show, amongst other things, that is is registered as a business in a non-EU country. This is done by providing a Certificate of Status which has to show:

  • the name, address and official stamp of the issuing body, and
  • the claimant’s:
    • name and address;
    • business activity; and
    • business registration number.

Where the claimant’s address is a PO Box number HMRC will want evidence that it relates to the business establishment rather than a mailing address.

HMRC is reviewing claims, for the year from 1 July 2016 to 30 June 2017, that were rejected as a result of the change in procedure provided it had been submitted by the due date of 31 December 2017. Claims rejected before 23 May 2018 will remain rejected. The review of claims may still result in a claim being rejected, and a new decision will be issued that can be challenged.

This article covers only a specific issue. If you are looking to make a claim in the future you must read VAT Notice 723A: Claim back VAT paid in the EU if you’re established elsewhere

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