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VAT refunds to overseas businesses

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HMRC has published a new VAT brief setting out its revised policy for VAT refunds to overseas businesses which have been unable to provide a certificate of status by the relevant deadline.

In a change of policy, HMRC is to allow non-EU overseas businesses to claim VAT refunds where those businesses have had difficulties acquiring certificates of status (COS) because of delays caused by the relevant issuing authority dealing with exceptional one-off events such as a global pandemic.

Revenue and Customs Brief 15 (2021): Repayment of VAT to overseas businesses not established in the EU and not registered in the UK confirms that HMRC will accept late certificates where the official authority could not issue a certificate in good time. In these circumstances, businesses will need to submit their certificate to HMRC within a ‘reasonable time’ after it was issued – which HMRC suggests is ‘within 30 days’. Businesses may also need to give evidence of the delay, and establish that they requested the certificate within a reasonable time. Such evidence may include information from the official authority’s website. It should be noted that existing deadlines continue to apply for all other documents.

The brief sets out the following examples of one-off, unavoidable events:

  • global pandemic;
  • national epidemic;
  • national emergency; and
  • government shutdown.

This policy supersedes previous relaxations set out in Revenue and Customs Briefs 20 (2020) and 10 (2021) which extended the deadline for submitting COS for the prescribed year 1 July 2019 to 30 June 2020, first to 30 June 2021 and subsequently to 31 December 2021. Normally, COS are required to be submitted alongside the refund application within six months from the end of the prescribed year.

VAT Notice 723A: Refunds of UK VAT for non-UK businesses or EU VAT for UK businesses has also been updated accordingly at section 3.7.2 ‘Certificate proving your business activity’ to cover situations where HMRC will accept a certificate of status submitted after the relevant deadline.

Issue: 1558
Categories: News