R & C Brief 10 (2021): Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK

HMRC have published Revenue & Customs Brief 10 (2021): ‘Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK’, announcing a further deadline extension to the overseas VAT refund scheme, following continued difficulties faced by some businesses in obtaining a certificate of status. 

Background

• Businesses overseas that are not established in the EU, not VAT registered in the UK and incur UK VAT for the purpose of their business, may be eligible to reclaim that VAT using the overseas VAT refund scheme.
• Applications for refunds in respect of 1 July 2019 to 30 June 2020 should have been submitted with a certificate of status no later than 31 December 2020.
  • In December 2020, HMRC announced a Six-month extension to this usual deadline, taking it to 30 June 2021, in respect of supplying a certificate of status. 

Current position

• Some businesses and their agents are continuing to have difficulty in obtaining the required certificate of status owing to the Coronavirus pandemic.
• As a result, HMRC will allow an additional six months to submit a valid certificate of status: this must now be submitted by 31 December 2021.
• Payments will not be made until a valid certificate of status is received by HMRC.
• HMRC will aim to make payments within six months of receiving the valid certificate of status.

Prescribed period: 1 July 2020 to 30 June 2021

• The deadline to submit applications for VAT refunds and all other documentary evidence for the prescribed period 1 July 2020 to 30 June 2021 remains 31 December 2021. 
• Certificates provided to HMRC throughout 2021 will remain valid for claims relating to the period ending 30 June 2021. 

Useful guides on this topic

Place of supply: Goods
The place of supply (POS) of goods determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

International goods
Special VAT rules apply to goods bought from and sold to non-UK businesses. 

How to reclaim VAT on business expenses in the EU?
How to reclaim VAT on purchases abroad: refunds of VAT in the EU for UK businesses from 1 January 2021. 

External link

Revenue and Customs Brief 10 (2021): repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK