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If you buy goods or services for your business in the UK, you may have to pay VAT on them. You may be able to reclaim the VAT you paid in the UK if you're VAT-registered in your own EU country, and bought the goods or services to use in your business.
You can't reclaim it from your own tax authority but there's a Refund Scheme that you might be able to use to reclaim it from the UK. What you can reclaim depends on the UK's rules for claiming input tax. This guide explains who can use the Refund Scheme, what you can and can't claim under the scheme, how to make a claim and how you'll be paid.
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Anyone who's registered for VAT in an EU country can use the Refund Scheme to reclaim VAT paid in another EU country. This means that if you're VAT-registered in the EU, you can use the scheme to reclaim VAT you've paid in the UK on goods or services you've bought for your business.
You can only use the Refund Scheme if all of the following apply:
But if you do make supplies in the UK, you can still use the scheme if the only supplies you make here are either:
You can use the Refund Scheme for most other things that you buy in the UK for your business, including:
You can't use the Refund Scheme to reclaim VAT on goods or services you buy for resale. This might include things like hotel accommodation you buy to resell.
Also, you can't reclaim VAT on:
If your business makes both taxable and exempt supplies, you may not be able to recover all of the VAT you have been charged.
If you bring in goods to use in your business from outside the EU into the UK - these are called imports - you may have to pay VAT on the imports in the UK. You can use the Refund Scheme to reclaim the VAT you've paid on these imports unless you either:
You claim refunds of VAT paid in the UK by completing an online form and submitting it via your own tax authority.
You can make a refund claim yourself or you can use an agent, it's up to you. To be able to act for you and receive money on your behalf, your agent will need a letter of authority.
'We [name, address and VAT registration number of business] hereby authorise [name and address of agent] to:
We hereby undertake to repay any amounts wrongfully received.
This letter of authority cancels and replaces any previous letters of authority.
You must claim your refund no later than nine months after the end of the calendar year when you were charged the VAT. If you miss the deadline, you won't be able to make a claim for that year. So if you were charged the VAT in April 2009, you must claim a refund by 30 September 2010 at the latest.
Your claim can't be for a period of:
There's no limit to the maximum amount you can claim. But the UK has set the following minimum limits:
You can also include items missed on earlier claims so long as they related to VAT charged in the calendar year of the claim.
As this is an online system, you don't need to send any paper invoices or other documents to HM Revenue & Customs (HMRC) when you submit your claim. But you must scan the invoice and attach it to your claim if the value on any invoice equals or exceeds:
You must keep all of the original invoices and other documents supporting your claim. HMRC may ask to see original documents when they authorise your claim.
You will receive confirmation, by email, when your claim has been received by HMRC. This may take up to 16 days from the date when you submitted the claim, but should normally be much sooner. Once you have received this confirmation, you should send any queries about the claim to HMRC, not to your own tax authority.
HMRC must give you a decision on your claim within four months of receiving it. If they need further information, HMRC must ask you for this within the same four-month period, and you must provide the information within one month. HMRC will then have further time to consider your claim, but they must give you a final decision no later than eight months after they received your claim. If there is a refund due to you, they must pay this within:
If HMRC does not pay you within these timescales, you will be entitled to interest on the amount of the refund. The interest will be calculated at the rate which applies to traders in the UK, and will run from the date payment was due until the date payment is made.
The deadline to submit 2009 EU VAT Cross-Border refund claims has been extended from 30 September 2010 to 31 March 2011.
A six month extension to the deadline, which was previously 30 September 2010, has been agreed because of technical problems with a number of other Member States' portals.
Please note: If you make a refund claim during this extended period the HMRC VAT EU Refund service will display the following warning message:
'The refund period start month cannot be before January of this year'.
Please ignore this message. Your claim will be processed and forwarded to the Member State of refund for consideration
HMRC will make refunds by bank transfer, in pounds sterling. You can arrange the transfer to either a bank in the UK or in any other EU country, by entering the relevant bank account details when you complete your claim. If you have to pay bank charges on the transfer they may be deducted from the amount of your refund.
You can help to ensure that your claim won't be refused by making sure:
If your claim is refused HMRC will always tell you why. If you don't agree with HMRC's decision, you can either ask HMRC to review the decision, or you can appeal to an independent tribunal.
If HMRC finds your claim isn't correct after the refund has been paid, they'll normally deduct any overpayment from your next refund.
If you've claimed too much, HMRC will get back the amount you've been overpaid by deducting it from the next refund, and you may incur a penalty for sending in an incorrect claim, so you do need to make sure your claim is right.
The UK authorities take a very serious view of false claims. They can recover any refunds obtained by a false claim and can charge you a penalty.