The VAT refund scheme
VAT paid in other EU countries is often recoverable by VAT registered businesses in the UK, who bought goods or services for business use. The amount of VAT that is refundable depends on the other countries’ rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never by reclaimed on a domestic UK VAT return.
The rules for UK businesses claiming VAT refunds from other EU countries changed on 1 January 2010 with the replacement of the old 8th VAT Directive refund scheme. Since then claims must be made electronically via the tax authority in which the claimant is established i.e. a claim from a UK company to any other EU country must be submitted electronically to HMRC. The deadline for the submission of a refund request for expenses incurred in other EU member states during the 2013 calendar year is 30 September 2014.
There are also special rules for businesses established outside the EU submitting a claim for VAT incurred in the UK. The deadline for the submission of a refund request for expenses incurred in the UK by non-EU businesses during the period 1 July 2013 – 30 June 2014 is 31 December 2014. There are a number of conditions which must be met in order for a claim to qualify.