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 in countries outside of the UK can reclaim VAT incurred in the UK and that UK and Isle of Man businesses can claim a refund of VAT incurred abroad.

1.2 Laws that cover this notice

UK law:

• Value Added Tax Act 1994, Section 39
• VAT Regulations 1995 (SI 1995/2518) Parts 20A and XXI
• The VAT (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 broadly similar to UK legislation. The schemes described in this notice apply equally to refunds of VAT incurred in the Isle of Man. Any references to the UK in this notice are to be taken to include the Isle of Man.

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

What this scheme is for

If you’re registered for business purposes in a country outside the UK and you buy goods or services in the UK, you may have to pay UK VAT. This need not happen 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.

If you’re not registered for VAT in the UK you cannot treat this VAT as input tax, but you may be able to use this scheme to reclaim VAT charged on imports into the UK or purchases of goods and services used in the UK.

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 broadly similar to UK legislation. This scheme applies equally to refunds of VAT incurred in the Isle of Man. Any references to the UK in this notice are to be taken to include the Isle of Man.

2.1 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 these 2 conditions:

• you are not registered, liable or eligible to be registered for VAT in the UK, you’ll find more about this in Notice 700/1: who should register for VAT
• 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 traders 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 traders to use it.

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

2.2 Goods and services you can and cannot reclaim VAT on

During the refund period you can claim UK VAT on:

• goods and services purchased
• goods imported into the UK

You cannot use the scheme to reclaim VAT on:

• goods and services 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
• 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 tax invoice will be issued
• business entertainment or hospitality expenses, as an exception, VAT on entertainment for overseas customers may be reclaimed but only if it is of a very basic nature
• export of goods, but these will be zero-rated, provided the supplier has the necessary evidence
• goods and services, like hotel accommodation, you have bought for resale which are for the direct benefit of travellers
• 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 VAT Act 1994, whether or not the place of the supply is in the UK)
• goods in Northern Ireland that could be claimed under the process for claiming VAT incurred in Northern Ireland

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 see guidance on the Retail Export Scheme (Northern Ireland) — Notice 704.

2.3 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 further information read Notice 706: partial exemption.

2.4 VAT paid on imports

If you’re importing goods into the UK you can reclaim any VAT due, provided there is no other 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. Find out about paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland.

2.5 Claim limits

There is no maximum amount you can claim, but the UK has set minimum claim amounts that can be refunded.

Your application should cover any VAT you’re reclaiming over a period of at least 3 months but not more than the full prescribed year.

When your application is for a period covering less than 12 months, the total amount of VAT claimed must not be less than £130.

The application can cover less than 3 months if this is all that remains of the prescribed year. In that case, or when the application is for the full 12 months of the prescribed year, the amount of VAT claimed must not be less than £16.

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

2.6 Time limits for making an application

You must make any claim no later than 6 months after the end of the ‘prescribed year’ in which you incurred the VAT.

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

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

2.7.1 Electronic submission of claims

You can now submit claims electronically using HMRC’s Secure Data Exchange Service (SDES) system. The system is optional and there are no immediate plans to make it mandatory.

The Secure Data Exchange Service is currently being tested. It is available to businesses and agents to make claims, but during the testing period you will need to email newcastle.oru@hmrc.gov.uk to request access.

Whilst the service is being tested, there may be times when we need to stop it without notice. If we need to stop the service, we will tell you by updating our online guidance to let you know how to submit your claim. If we stop the service, this will not affect the claims that have already been submitted through it.

If you want to submit an electronic claim ahead of the 31 December deadline, you must apply to register on or before 30 November to enable us to successfully put you onto the system.

If you do not want to use the service to submit your claims, or you have not registered to use it by 30 November, all claims must be made by post. See the Postal Claims section on this page (2.7.2).

Requesting access to the Secure Data Exchange Service

If you want to submit your claims using the Secure Data Exchange Service, you need to email newcastle.oru@hmrc.gov.uk. You should include:

• ‘SDES’ in the subject field
• confirmation you would like to use the Secure Data Exchange Service
• whether you have a Business Tax Account already set up

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

If you have any difficulty during the registration process, contact the Overseas Repayment Unit (ORU) on 0300 322 9279. Do not contact the VAT helpline, as they will only direct you to this notice.

After you’ve submitted a claim

You will receive a dated receipt. If you do not receive a receipt, email newcastle.oru@hmrc.gov.uk and put ‘SDES Claim’ in the subject.

If you do not receive any contact within 6 months of submitting your claim, email newcastle.oru@hmrc.gov.uk attaching the date stamped SDES receipt to let us know.

We have the right to request any and all original hard copies of documents associated with your claim, so you must keep these. Failure to do so may result in claims being rejected in full or in part. Read the proof that you’ve paid VAT section (2.10 on this page) for details of documents that are needed to make a claim.

2.7.2 Postal Claims

If you do not want to use the Secure Data Exchange Service, or you do not register for the service before 30 November, you must post your claim to HMRC on or before 31 December.

You must send us your:

• VAT65a
• Certificate of Status (CoS)
• invoices
• other supporting documents and information

This information 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.

2.8 Application form

Apply using form VAT 65A.

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 VAT Regulations 1995 SI 1995/2518 section 191(1) (a)) may be made on form VAT 65A 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 and contains the same information and declaration set out in the VAT 65A.

2.9 Certificate of status

2.9.1 Certificate proving your business activity

When you make your first application you must also include a certificate of status (CoS) from the official authority in your own country showing 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 company’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, the address and official stamp of the authorising body (or other recognised identification mark)
• your own name and address (if you have a PO Box address, more information can be found in the business address section on this page — 2.9.3 )
• the nature of your business
• your business registration number

You must apply for the certificate of status and send it to HMRC before the relevant deadline. In the case of an exceptional event where the official authority cannot issue a certificate in good time, we will accept certificates that are late. Examples of these 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.

If you are submitting your claim electronically, you must retain the original certificate of status. If you are sending your claim by post, you must send the original certificate — a photocopy is not acceptable.

You may use form VAT 66A.

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 VAT Regulations 1995 SI 1995/2518 section 191(1)(b)(i) may be made on form VAT 66A and must contain the information requested on that form.

The legislation also provides for use of a similar form if it is produced by an official authority and contains the same information set out in the VAT 66A.

2.9.2 Submitting an electronic certificate

We will accept electronic certificates of status (e-CoS) 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.

If the nature of your business is missing from the electronic certificate of status, we may ask you to provide alternative evidence.

2.9.3 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.

2.9.4 Length 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, obtain and send a new one issued by the official authority in your country of establishment with your next application.

2.10 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 need only 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 that you have paid.

If you are sending your claim electronically, you must keep originals of all invoices and import documents with your application. If you are submitting your claim by post, you must send original documents — copies are not acceptable.

2.11 Letter of authority

You can prepare and send in your own application or have this done by an agent. Your agent will need either a Power of Attorney or letter of authority before acting for you, and to receive money on your behalf.

Example — format of a letter of authority acceptable to customs

‘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)’

2.12 When your refund will be paid

The refund will be made within 6 months of receiving a satisfactory application. If your application is in order, the invoices showing that you have paid the VAT will be returned to you as soon as your application is authorised for payment. If you have a query about an application you have made contact the UK VAT Overseas Repayment Unit.

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.

2.13 Method of payment

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

• SWIFT (Society for Worldwide Inter-Bank Financial Telecommunications)
• a UK bank
• by payable order in sterling directly to yourself or to your appointed agent

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 make sure that you 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. If you opt for payment by payable order you should cash it at your own bank. Payable orders are computer generated and, unlike cheques, they’re not signed. They should not be returned to HMRC for encashment.

2.14 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

We will not take any action to collect the disputed tax while the review of the decision is being carried out.

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

You can get more information 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 the EU and in other 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 certificate of status to get a refund.

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 HM Revenue and Customs and what we expect from you.

Help us improve this notice

If you have any feedback about this notice, email: customerexperience.indirecttaxes@hmrc.gov.uk.

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 or make a VAT enquiry online.

Putting things right

If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.

How HMRC uses your information

Find out how HMRC uses the information we hold about you.