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VAT refunds for EU businesses after Brexit

28 October 2019

The UK tax authorities have just published new guidance containing interesting details on the procedure for refunding VAT paid by EU companies in the UK that do not have a fixed establishment in the UK.

The procedure would either apply from (1) the first day of a “hard withdrawal” of the United Kingdom from the EU (“Brexit”), or (2) from the day after the end of a transitional period.

The electronic procedure made available to businesses to claim VAT refunds paid within the EU will no longer be available from the date of Brexit.

The UK tax authorities specify that the procedure to be followed will be same as the procedure currently in force for companies that are established in non-EU countries.

This procedure is as follows:

  • The refund period will be from 1 July to 30 June (and no longer from 1 January to 31 December for refunds within the EU);
  • The deadline to submit an application for a refund is six months following the end of the relevant refund period (i.e. 31 December);
  • The period the request for refund can cover cannot exceed the reference year or be less than three calendar months.

However, the claim may cover a period of less than three months where this period constitutes the balance of a reference year.

  • The amount to be refunded must be no less than:
    • £130 for claims covering a period between three and 12 calendar months;
    • £16 for claims covering a reference year or the balance of a reference year where it is less than three months.
  • Companies will have to provide a certificate confirming their taxable status in the country in which they are established, the form VAT66A can be used for this purpose. If the prescribed form is not used, the certificate must include the following information:
    • Name, address and official stamp of the competent administrative authority;
    • Name and address of the company making the request;
    • Nature of the activity for which the refund is claimed; and
    • The identification number of the company concerned.

The certificate is valid for 12 months and will therefore have to be renewed at the end of this period.

It will not be necessary to appoint a tax representative.

Applications for refunds must include the original invoices showing the VAT paid. Refund claims will be made by completing form VAT65A (the form, which currently applies to companies that are not established in the EU, should be adapted for this purpose).

Claims for refunds will be processed within six months of the application, subject to a longer period if the UK tax authorities request additional information. The original invoices will be returned to the applicant once the request has been approved.

In order to simplify your procedures, we recommend that you submit your final refund requests online as soon as possible, via the electronic portal (for so long as it remains available) on the basis of the rules applicable to companies established in the EU.

Our lawyers are at your disposal to review the claims you may make and assist you in these steps.

Please contact your usual CMS advisor for further assistance.