In a time long ago, before the COVID-19 virus stalked the earth, business people would travel to meet their customers, and marvel at the bountiful swag to be gathered at trade shows. In doing so they would incur business expenses that included VAT charged by other countries.
That overseas VAT can’t be claimed through a UK VAT return, but it can be reclaimed through the HMRC online VAT service. Claims for overseas VAT incurred in 2020 need to be submitted to HMRC by 11pm on 31 March 2021. Until this date, previous refund claims can be viewed and amended as well.
Any overseas VAT incurred after 31 December 2020 can’t be included in a claim through the HMRC online VAT service, as the UK system will no longer be linked to the EU-wide VAT reclaim service.
UK businesses will have to reclaim VAT paid in EU countries in 2021 and later years, by submitting claims directly to the tax authority of the country where the VAT was incurred. These claims normally need to be submitted on paper and usually in the country’s own language. Each EU country has different refund claims deadline.
You will have to work out whether the time spent dealing with the paperwork, and in many cases battling with forms written in another language, is worthwhile to claim the small amounts of overseas VAT.
Written by the Tax Advice Network