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VAT refund in UK for non-established businesses

Vat refund in UK

Non-established businesses having expenses in the UK can apply for VAT refund under certain conditions. Find below how VAT refund in UK works and what criteria you need to meet in order to be eligible for a VAT refund in the UK.

VAT refund for EU companies after Brexit

Starting January 2021 and further to Brexit, the procedure to claim UK VAT back for businesses established within the EU has changed.

All non-established companies that need a VAT refund for goods and services purchased in the UK, can request their VAT refund under the rules set out by the 13th Directive.

EU companies claiming back British value added tax for goods and services, will have to use a specific form.

When can a business claim VAT back?

A refund can be requested whenever a business is not:

  • registered for VAT in the UK
  • established in the UK and do not make any supplies in the UK

Moreover, UK authorities will make sure that the company’s country of establishment allows similar reimbursement concessions to UK companies in order to authorize the tax return.

What is the time limit to apply for UK VAT return?

The UK considers the period from July 1st to June 30th as a fiscal year. The time limit to claim tax returns is 6 months after the end of the fiscal year, which means that reclaims can be sent to UK fiscal authorities up until December 31st.

The exception of Northern Ireland

Thanks to the Northern Ireland Protocol, there is an exception to the new rules of claiming back VAT whenever it is part of a purchase of goods within the territory of Northern Ireland. In this specific case, EU-established businesses will be able to recover VAT through the electronic cross-border refund system put in place for VAT recovery in the EU, which means by the rules of the 8th Directive.

In this sense, for any goods purchases in Northern Ireland with VAT, EU-based companies have to file their VAT refund request via the portal of their Member State of establishment and not by following UK post-Brexit specific rules.

The deadline for tax refund requests in Northern Ireland is 30th September.

On the other hand, it was decided that recoverable VAT invoiced on the provision of services would be instead considered a different matter for which UK 13th Directive rules as explained above would apply, instead of the usual 8th Directive filing.

How do I get a VAT return?

Keeping in mind the time limits, namely 31st December, you can collect all your invoices where UK VAT was charged during a fiscal year and start filing the return procedure. You will need to evaluate the type of expenses and to attach some documents to support your claim. As usual, the help of a professional expert in tax returns will ensure a successful and optimized claiming in front of the UK authorities, as well as a possibility of receiving your refunds quickly, if conditions for pre-payment of VAT apply for your business.

Contact FastVAT today and discover your options to improve cashflow.

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