2 mins | January 23, 2024

A pocket guide to reclaiming VAT from the UK

We read the fine print, so you don’t have to.
Ready to learn more about how we can help you recover VAT in the UK?
A pocket guide to reclaiming VAT from the UK

Great - you’ve got stacks of VAT recovery opportunities waiting to be reclaimed. Except for one tiny problem: you do not know where to begin. We don’t blame you. VAT reclaim (especially from the UK) is no easy feat. Not only do you have to absolutely ace the internal VAT recovery process, but you also need expertise in global VAT legislation. Not to mention the resources and workforce it takes to ensure all claims are submitted on time and comply with local tax laws. 

Fortunately, we’re here to iron out the creases so you can benefit from smooth and effortless VAT recovery in the UK without breaking a sweat behind the scenes. Here’s everything you need to know in one jam-packed pocket guide to UK VAT recovery. 

First things first, are you eligible to reclaim VAT in the UK?


Can I reclaim VAT in the United Kingdom?

Good news - you don’t have to be registered for VAT in the UK to leverage the foreign VAT reclaim opportunity. But not so fast; that doesn’t mean all businesses get a free hall pass. Here are some of the most imperative eligibility requirements for UK VAT reclaim. 

  • You must be VAT-registered for business purposes in a country outside of the United Kingdom.
  • For foreign recovery, you must not be registered, liable, or reliable to be registered for VAT in the UK.
  • You cannot have a place of business or other residences inside the UK, nor can they make any taxable supplies in the UK.

Check all three boxes? You’ve got VAT to recover! But there’s one catch: scratch my back, and I’ll scratch yours, right? For successful VAT recovery, your own country must allow similar concessions to UK traders in respect of its own turnover taxes.


Yay or nay? Which goods and services are reclaimable?

When it comes to VAT reclaim in the UK, businesses established outside of the UK can claim VAT on goods and services purchased as well as goods imported into the UK. However, there are a few red flags. You cannot use the scheme to reclaim VAT on:

  • Goods and services that are used for non-business activities, but if a supply covers both business and non-business use, VAT can be reclaimed on the business element of the supply only.
  • Certain second-hand goods, like cars and antiques, for which no tax invoice will be issued for business entertainment or hospitality expenses; as an exception, VAT on entertaining overseas customers may be reclaimed, but only if it is of a very basic nature.
  • The export of goods - these will, however, be zero-rated, provided the supplier has the necessary evidence.
  • Goods and services, like hotel accommodation, you have bought for resale, which is for the direct benefit of travellers.

Let’s talk paperwork: What’s required to file a VAT refund claim?

In an evolving VAT landscape, one thing is certain: there’s always going to be paperwork (and lots of it). In order to apply for a VAT refund, non-UK registered businesses must apply directly to HMRC using the appropriate form and supporting documentation. This includes the original application certificate as well as additional information regarding your business address and registration number. 

Subsequently, you will also have to provide evidence that you have paid the VAT in question. If the value of supply exceeds a certain amount, proof of payment must include an identifying number from suppliers, their addresses, and VAT registration numbers.

Fortunately, we read the fine print, so you don’t have to.

Ready to learn more about how we can help you recover VAT in the UK? Download our guide here: https://vatit.com/project/united-kingdom/

VAT refund Tool kit

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Discover which countries your business can reclaim from with our country guides.
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Navigate the intricacies of your invoices. Use our interactive tool to find out what is required to optimise your claims.
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