Refunds of UK VAT for non-UK businesses (VAT Notice 723A)

This notice applies to supplies made on or after 1 January 2021.

Find out about supplies made in Northern Ireland.

1. Overview

1.1 What this notice is about

This notice explains how businesses established outside of the UK can reclaim VAT incurred in the UK. It also explains that UK and Isle of Man businesses can claim a refund of VAT incurred abroad.

1.2 Laws that cover this notice

The UK laws that cover this notice are:

• Value Added Tax Act 1994, Section 39
• Value Added Tax Regulations 1995 (SI 1995/2518) Parts 20A and XXI
• Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (SI 2020/1495) Part 3

1.3 Isle of Man

For VAT purposes, the Isle of Man is treated as part of the UK. VAT is chargeable in the Isle of Man under Manx legislation, which is similar to UK legislation. The scheme described in this notice also applies to refunds of VAT incurred in the Isle of Man. Any references to the UK in this notice include the Isle of Man.

2. Refunds of UK VAT for businesses established outside the UK

2.1 What this scheme is for

You may have to pay UK VAT if you’re registered for business purposes abroad and you buy goods or services in the UK. This does not apply if you buy goods for export, but it may apply if what you buy is used in the UK. For example, if you take part in a trade fair.

You cannot treat this VAT as input tax if you’re not registered for VAT in the UK. You may be able to use this scheme to reclaim VAT charged on:

• imports into the UK
• purchases of goods and services used in the UK

2.2 Who can apply

If you’re registered for business purposes in a country outside the UK, you may use the scheme to reclaim VAT paid in the UK. You can do this if you meet the 2 following conditions:

• you are not registered, liable or eligible to be registered for VAT in the UK — find more information in Who should register for VAT (VAT Notice 700/1).
• you have no place of business or other residence in the UK and do not make any supplies in the UK (other than transport services related to the international carriage of goods, or supplies where VAT is payable by the person in the UK to whom the supply is made)

It is a condition of the scheme that your own country allows similar concessions to UK businesses in respect of its own turnover taxes. Your application will only be refused on these grounds if your own country has a scheme for refunding these taxes but refuses to allow UK businesses to use it.

If you are an EU business and your claim relates to VAT on expenditure incurred on goods in Northern Ireland, read claim VAT refunds in Northern Ireland or the EU, if you’re established in Northern Ireland or in the EU.

2.3 Goods and services you can and cannot reclaim VAT on

During the refund period you can claim UK VAT on:

• goods and services purchased in the UK
• goods imported into the UK

You cannot use the scheme to reclaim VAT on:

• goods and services used for non-business activities — if a supply covers both business and non-business use, VAT can be reclaimed on the business element of the supply
• any supply used or to be used to make a supply in the UK
• the supply or importation of most ordinary business cars — only 50% of the VAT incurred on the hire of lease of a car for mixed business and private purposes is allowed
• certain second-hand goods, like cars and antiques, for which no VAT invoice will be issued
• business entertainment or hospitality expenses — VAT on entertainment for overseas customers may be reclaimed but only if it is of a very basic nature
• export of goods (whether direct or indirect), but these may be zero-rated, provided the supplier has the necessary evidence — find more information in VAT on goods exported from the UK (VAT Notice 703)
• goods and services you have bought for resale which are for the direct benefit of travellers — for example, hotel accommodation
• any supply used, or to be used, to make an exempt supply outside the UK (for this purpose an exempt supply is a supply described as exempt in Schedule 9 to the Value Added Tax Act 1994, whether or not the place of the supply is in the UK)
• goods that can be claimed under the Northern Ireland Protocol

There is also a VAT Retail Export Scheme which allows non-EU visitors a refund of VAT on certain goods that they buy in Northern Ireland. For more details of the scheme, read guidance on the Retail Export Scheme (Northern Ireland).

2.4 Partial exemption

In most cases, where goods and services are used to make both taxable and exempt supplies, you can only recover VAT to the extent that they are used to make taxable supplies. For more information, read Partial exemption (VAT Notice 706).

2.5 VAT paid on imports

If you’re importing goods into the UK, you can reclaim any VAT due if there is no VAT relief available at import. But you’ll not be able to use the scheme if, as a result of importing the goods, you become liable to register for VAT in the UK.

Import VAT may only be claimed by the owner of the goods. For VAT purposes, ownership means you have ‘the right to dispose of goods as owner’.

Find out about paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland.

2.6 VAT groups

When VAT is incurred by businesses who receive VAT group treatment, the representative member of the VAT group must apply on behalf of all the members. As the supporting invoice produced may not be addressed to the representative member, the certificate of status must also contain the names of the group members who incurred the VAT (read section 2.12).

2.7 Application periods

The refund period is the 12 months from 1 July to 30 June of the following calendar year. This is called the prescribed year.

The period covered by an application must not be more than the prescribed year or less than 3 calendar months, unless the period covered represents the remainder of the prescribed year. For example, where applications covering earlier periods have already been submitted.

You can also include items missed on earlier applications as long as they are related to VAT charged in the prescribed year.

2.8 Minimum amount for a claim

If the refund application relates to a period covering less than the full prescribed year but is at least 3 calendar months, the minimum amount claimable is £130.

The minimum amount claimable is £16 if the refund application relates to either a period covering:

• the full prescribed year
• less than 3 calendar months where it represents the remainder of the prescribed year

2.9 Time limits for making an application

You must submit your application by 31 December following the end of the prescribed year.

The prescribed year is the 12 months from 1 July to 30 June of the following calendar year, so you must make your application no later than 31 December.

To ensure fair treatment for all claimants, applications are dealt with on a ‘first come, first served’ basis and the time limit is applied strictly.

2.10 How businesses established outside the UK can claim refunds of UK VAT

2.10.1 Electronic submission of claims

You can now submit claims electronically using HMRC’s Secure Data Exchange Service (SDES).

In your electronic claim, you must include your:

• application form (VAT65A)
• certificate of status
• invoices
• other supporting documents and information

You will need to be registered for SDES before you can make an electronic claim. To request access, email the Overseas Repayment Unit (ORU) and include:

• ‘SDES’ in the subject field
• confirmation you would like to use SDES
• whether you have a business tax account already set up

We will contact you within 15 calendar days to start the registration process and provide registration guidance.

If you are not currently registered for SDES and want to submit an electronic claim by the application deadline on 31 December, you must request access by 30 November.

If you have any difficulty during the registration process, call the ORU. Do not contact the VAT helpline — they will only direct you to this notice.

2.10.2 After you’ve submitted an electronic claim

You will receive a dated receipt. If you do not receive a receipt, email the ORU and put ‘SDES Claim’ in the subject.

If you do not receive any contact within 6 months of submitting your claim, email the ORU, attaching the date-stamped SDES receipt.

You must keep all original hard copies of documents associated with your claim. We have the right to request these. Failure to keep such documents may result in claims being rejected in full or in part. Read ‘proof that you’ve paid VAT’ (section 2.13) to find out which documents you need to make a claim.

2.10.3 Postal claims

You must post your claim to HMRC on or before 31 December if:

• you do not want to use the SDES system
• you do not register for SDES before 30 November

You must send us your:

• application form (VAT65A)
• certificate of status
• copies of original invoices
• copies of other supporting documents and information

You must send the original certificate of status but should send copies of all other documents with your claim.

You must keep all original hard copies of documents associated with your claim until your claim is processed. We have the right to request these. Failure to keep such documents may result in claims being rejected in full or in part. Read ‘proof that you’ve paid VAT’ (section 2.13) to find out which documents you need to make a claim.

We are not able to return any documents to you.

The claim should be sent to:

We may ask you to provide proof of postage to confirm that you posted the claim on or before 31 December.

2.10.4 Email security

We can only correspond with you by email if you have given us your permission. You can do this either by:

• giving permission on the VAT65A
• including the following email consent when you make a claim — ‘I understand and accept the risks associated with corresponding by email, and I am content for HMRC to send this sensitive information to me by email’

If you are the authorised agent or representative, you will need to confirm in writing that your client understands and accepts the risks.

This email consent is valid for 12 months and will need to be updated.

For more information, read HMRC’s privacy notice.

Read factsheet CC/FS72 DSC1 Corresponding with HMRC by email to find out more about contacting HMRC by email.

2.11 Application form

Apply using the VAT65A form.

The VAT65A should be completed electronically. The schedule at question 9 must be typed and not handwritten.

The next sentence has force of law under the Value Added Tax Regulations 1995.

Applications by non-UK businesses for refunds of VAT incurred in the UK (under the terms of Value Added Tax Regulations 1995 (SI 1995/2518) regulation 191(1) (a)) may be made on form VAT65A and must contain the information requested on that form.

The legislation also permits use of a similar form if:

• it is produced by an official authority
• it contains the same information and declaration as the VAT65A form

2.12 Certificate of status

2.12.1 Certificate proving your business activity

When you make your first application, you must also include a certificate of status from the official authority in your country. This will show that you’re registered for business purposes in that country.

When you apply for the certificate of status, make sure you ask for it to show all the information that the UK authorities will need to process your application. For example, if the invoices are made out in your business’s trading name, the certificate must show this as well as the name of the person registered.

The certificate of status must contain:

• the name, address and official stamp of the official authority (or other recognised identification mark)
• the name and address of the business (if this is a PO Box address, more information can be found in paragraph 2.12.3)
• the nature of your business
• your business registration number

If you are submitting your claim electronically, you must keep the original certificate of status. If you are sending your claim by post, you must send the original certificate. A copy is not acceptable.

If you are submitting a claim as part of a VAT group, the certificate of status must also include the names of the group members.

You must apply for the certificate of status and send it to HMRC before the relevant deadline. We will accept late certificates if there is an exceptional event which prevents the official authority from issuing a certificate in good time. Examples of exceptional events may be:

• a global pandemic
• a national epidemic
• a national emergency
• a government shutdown

The certificate of status must be supplied within a reasonable time after it was issued. You may be required to provide evidence of the delay, and that you requested the certificate within a reasonable time. This evidence may include information from the official authority’s website. You must still submit all other documents of the claim by the relevant deadline.

You may also use the VAT66A form.

The next sentence has force of law under the Value Added Tax Regulations 1995.

The certificate of status for non-UK businesses required under the terms of Value Added Tax Regulations 1995 (SI 1995/2518) regulation 191(1)(b)(i) may be made on form VAT66A and must contain the information requested on that form.

The legislation also allows the use of a similar form if:

• it is produced by an official authority
• it contains the same information set out in the VAT66A form

2.12.2 Submitting an electronic certificate

We will accept electronic certificates of status if they’re issued by the official authority in your country of establishment and the official authority, or other recognised authority, has an online validation system that HMRC can access to verify that you’re in business.

We may request alternative evidence from you if information is missing from the electronic certificate of status.

2.12.3 Business address

This is the address where the business is established. For example, the place of its central administration and where the general policy and day to day running of business activities takes place. A postal or mailing address is not a business address.

We are aware that, in some regions, the address of a business establishment can include a PO Box because not all the roads and buildings are numbered.

Where we have received a certificate of status and it is unclear if the address is that of a business establishment, or a mailing address, we will ask for documentary evidence to make sure that this is the place where your business is established.

2.12.4 Validity of the certificate

Each certificate is valid for 12 months from its date of issue. It will cover any applications you make during that year. Once the certificate has expired, you will need to submit a new valid certificate with your next application.

2.13 Proof that you’ve paid VAT

You must have correctly completed invoices, vouchers or receipts from your suppliers showing:

• an identifying number
• your supplier’s name, address and VAT registration number
• your name and address
• details of goods or services supplied
• the date of supply
• the cost of the goods or services (excluding VAT)
• the rate of VAT
• the amount of VAT charged

If the value of a supply is £250 or less (including VAT), the invoice only needs to show:

• your supplier’s name, address and VAT registration number
• the date of supply
• details of goods or services supplied
• the cost of the goods or services (including VAT)
• the rate of VAT

If you have imported goods, you must have the VAT copy of the import entry or other customs document showing the amount of VAT you have paid.

2.14 Appointing an agent to make claim on your behalf

You can prepare and send your own application or have this done by an agent.

If you use an agent, they mustmay need to be authorisedregistered with HMRC as a tax adviser to act on your behalf. Find out if they need to register in Check if and when you need to register as a tax adviser with HMRC.

You must authorise your agent before actingthey act for you,you or receivingreceive any money on your behalf. You can authorise an agent using:

• a Power of Attorney
• a letter of authority

Example — format of a letter of authority acceptable to HMRC

‘I (name and address of claimant) hereby appoint (name and address of agent) to act on my behalf in connection with any application I make to the Commissioners of HMRC under the Value Added Tax Regulations 1995 as from time to time amended or replaced. Any repayment of VAT to which I am entitled pursuant to any such application made on my behalf by my above named agent shall be paid to (name and address of payee).

Date signed (by the claimant)’

2.15 Electronic signatures

You may use an electronic signature on the VAT65A, Power of Attorney or letter of authority. Electronic signatures may include:

• scanned or photocopied documents of handwritten signatures
• names typed into electronic documents or messages
• signatures signed on the screen of a digital device
• verified digital signatures

Signatures must be provided by the claimant themselves with full and informed consent. We may seek assurance or further information to verify this.

2.16 When your refund will be paid

The refund will be made within 6 months of receiving a satisfactory application. If you have a query about an application you have made, contact the ORU.

If your application is found to be incorrect after the refund has been paid, any overpayment will normally be deducted from your next refund.

HMRC may charge penalties for incorrect applications. If you have made an error, you should submit a correction as soon as possible.

We take a very serious view of false applications. Refunds obtained by means of a false application can be recovered, and penalties may be imposed.

2.17 Method of payment

Payment can be made directly to your own bank through one of the following:

• Society for Worldwide Inter-Bank Financial Telecommunications (SWIFT)
• a UK bank

As payment by SWIFT is faster, less expensive and more secure, you’re encouraged to use this method of payment. If you opt for payment by SWIFT, you must provide the following information, together with a copy of a bank credit slip:

• bank account number
• currency of account
• bank identification code
• bank account name
• bank name
• bank address

Payments to bank accounts will be made in pound sterling.

2.18 Application rejected

If your application is rejected, we’ll tell you the reasons why.

If you do not agree with the decision, you can either:

• ask for the decision to be reviewed by an HMRC officer not previously involved in the matter
• appeal to an independent tribunal

If you opt for a review, you can still appeal to the tribunal after the review has finished.

If you want a review, you should:

• write to the address given in the decision letter within 30 days of the date of the letter
• give your reasons why you do not agree with the decision

If you want to appeal to the tribunal you should send them your appeal within 30 days of the date of the decision letter.

Find out more about appeals and reviews.

3. How UK and Isle of Man businesses can claim overseas VAT

UK and Isle of Man businesses can claim refunds of VAT from countries abroad. This process varies across the world so you will need to follow the procedure set out by the country from which you’re making the claim. UK businesses may need to provide a VAT66 certificate of status.

Get more information about claiming VAT refunds from EU countries on the EU Commission’s website.

Check how to claim VAT refunds in Northern Ireland or the EU, if you’re established in Northern Ireland or in the EU.

Your rights and obligations

Read the HMRC Charter to find out what you can expect from us and what we expect from you.

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You will need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

If you need general help with this notice or have another VAT question, you should phone our VAT helpline.

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