When you incur VAT on business expenses in other EU countries, you mustn’t reclaim that VAT on your UK VAT return. However, if your business meets the following conditions it can reclaim the overseas VAT through HMRC’s VAT online services system:
• it must be registered for VAT in the UK;
• it must not be registered for VAT (or liable to be registered) in the country where the expenses were incurred;
• it must not have a place of business, fixed establishment or other residence, in that other EU country;
• it must not make supplies of goods or services in that EU country, except for transport services or services where the recipient pays the VAT.
You can claim for each complete quarter, if the refund claimed is €400 or more, or claim for the whole calendar year, if you are reclaiming €50 or more. These thresholds may vary in different countries. The deadline for submitting a claim for VAT incurred in 2016 is 30 September 2017; claims made after that date will not be accepted.
Your business can’t reclaim VAT on goods acquired for resale, or on goods brought into the UK from another EU country. The claim must be made in the national currency of the country to which the claim is directed. The supporting invoices must be retained, but those documents don’t need to be sent with the claim; they may be requested later.
There are rules on blocking refunds of VAT for particular categories of expenses, such as for business entertaining, which will differ across the EU. We can help you understand the rules on claiming overseas VAT.
