Refunds of UK VAT for non-UK businesses or EU VAT for UK businesses (Notice 723A)
Find out how to claim a refund of VAT in the UK if you are established outside the UK or how to claim back EU VAT if you are established in the UK or Isle of Man.
Detail
This notice cancels and replaces Notice 723A (October 2012).
This notice applies to supplies made on or after 1 January 2021, the day after the end of the Transition period.
Find out about supplies made in Northern Ireland on or after 1 January 2021.
For supplies made to EU businesses on or before 31 December 2020, please see section 3.
1. Overview
1.1 What this notice is about
This notice explains how UK and Isle of Man businesses can claim a refund of VAT incurred in the European Union (EU) and how businesses established in countries outside of the UK can reclaim VAT incurred in the UK.
1.2 Laws that cover this notice
UK law:
- Value Added Tax Act 1994, Section 39
- VAT Regulations 1995 (SI 1995/2518) Parts XX & 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. How UK and Isle of Man businesses can claim EU VAT
VAT incurred on or before 31 December 2020
UK and Isle of Man businesses claiming EU VAT incurred on or before 31 December 2020 must submit their claims through the portal by 31 March 2021. In order to be able to make an electronic application for refund of VAT you first need to register for VAT online services.
2.1 How to register for online services
You will need to have your VAT 4 Certificate of Registration and a copy of your last VAT Return to hand and follow the on screen instructions.
An activation code will be mailed to the business address registered with HMRC within set time limits (currently 7 to 10 days). Once this is received you will have 28 days from the date of the letter to activate the service.
2.2 Appoint an agent
Agents can register to enable them to make refund applications on behalf of their clients and additional security procedures have been built into their online application process. Full instructions are available on how to Appoint someone to deal with HMRC on your behalf.
As a security measure the activation code will be mailed to the business. The 28 days activation period will still apply therefore the business should forward the PIN to their agent in time for them to complete the activation process within 28 days, otherwise the PIN will expire and the process will have to be repeated.
In order to preserve agent and client confidentiality, HMRC’s customer contact staff cannot discuss applications with an agent who does not provide the full application reference number. If no application reference is quoted, only the client can discuss that application with HMRC.
The claim form has been largely standardised but the EU member state of refund retains the ability to decide preferences such as language required for any free text areas. Some EU member states now accept more than one language with English being a common option.
2.3 Eligibility to claim
You must be a taxable person registered for VAT in the UK or in the 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 taken to include the Isle of Man.
You must meet the following conditions:
- you must not be registered, liable or eligible to be registered in the EU member state of refund
- you must not have any fixed establishment, seat of economic activity, place of business or other residence in the EU member state of refund
- during the refund period you must not have supplied any goods or services in the EU member state of refund with the exception of:
- transport services and services ancillary thereto
- any goods or services where VAT is payable by the person to whom the supply is made
If you’re registered as a VAT group, and the group has member companies in the EU member state of refund, you may only use the refund scheme to claim VAT incurred by companies who are not established in, and do not make supplies in, the EU member state of refund.
By submitting your application through HMRC you’re declaring that you meet these conditions.
2.4 Proof of taxable person status
Applications will be subjected to automated registration verifications by HMRC before being forwarded electronically to the EU member state from which the refund is being claimed.
A certificate of status (VAT 66A) is therefore no longer required for refund applications from EU member states. Applications will only be forwarded to the EU member state of refund if these checks are satisfactory. If the checks are not satisfactory, the application will be rejected by the electronic portal and you will receive an appropriate error message.
Applicants that have cancelled their VAT registration must submit their applications as soon as possible from the date of cancellation.
For VAT group registrations, the application will be forwarded in the name of the representative member. Where the application relates to VAT incurred by other group members, it may be accompanied by a covering note explaining that these companies are members of the same VAT group. This note can be sent using the attachment facility for invoices (explained in paragraph 2.14, and may reduce requests for additional information from the EU member state of refund.
2.5 How to make a claim
A separate online application is required for each EU member state from which you wish to claim. In order to start an application you must access the relevant online services section using your unique PID and password and enter your standard data into the required fields, along with invoice or importation details for expenditure you wish to reclaim.
You can start an application and save it if it’s not complete. You can then recall it for completion and submission at a later date. This facility is available for applications relating to each EU member state.
2.6 Application periods
The refund period must not be more than 1 calendar year or less than 3 calendar months (unless the period covered represents the remainder of a calendar year, for example, where interim applications have already been submitted earlier in the year covering more than 9 months, or if you have recently become VAT-registered).
Refund periods do not have to cover strict calendar quarters. For example, you may submit 2 applications covering 5 months each, and a final one covering 2 months. But some EU member states have their own requirements, and details of these can be obtained from the relevant tax authority.
Refund periods may not overlap. For example, you may not submit an application covering 1 January to 31 March and another for 1 March to 31 May. You may submit a further application covering the whole refund year after the year end. This enables you to claim for any purchases which you have missed in earlier periods.
2.7 Minimum amount for a claim
If the refund application relates to a period of less than a calendar year, but not less than 3 months the minimum amount claimable is 400 euros or the equivalent in national currency.
If the refund application relates to a period of a calendar year or the remainder of a calendar year the minimum amount claimable is 50 euros or the equivalent in national currency.
2.8 Invoices you can include in the application
Include in the application invoices relating to:
- supplies of goods or services with a tax point during the period of the refund application
- an importation of goods into the EU member state of refund during the period of the refund application
In addition you may claim for invoices or imports not included in a previous application as long as they relate to the same calendar year.
The application may not include amounts of VAT that have been:
- incorrectly invoiced
- invoiced for goods sent to an EU member state or exported outside the UK and EU
- incurred for non business activities
2.9 Information covered in the standard information fields
- Name.
- Electronic contact address (email address).
- Description of your business activity to which the goods and services to be claimed relates (the electronic portal will permit up to 3 business activities to be entered).
- Period of application.
- Declaration of eligibility to claim (in the UK making an application is considered to be the declaration).
- VAT registration number.
- Specified bank account details to include IBAN and BIC.
2.10 Information required for invoices being claimed
- Name and address of your supplier.
- Except in cases of importation, the VAT identification number or tax reference number of the supplier and the prefix of the EU member state of refund.
- Date and number of the invoice or importation document.
- Taxable amount and amount of VAT expressed in the currency of the EU member state of refund.
- The amount of deductible VAT expressed in the currency of the EU member state of refund. This is the amount of VAT recoverable taking account of any partial exemption restriction, and any restriction on the recovery of input tax applying in the EU member state of refund.
- Where applicable, the deductible proportion calculated in accordance with the rules applying in the UK.
- Nature of the goods and services acquired, described according to the following expenditure codes:
| Code | Expenditure |
|---|---|
| 1 | Fuel |
| 2 | Hiring of means of transport |
| 3 | Expenditure relating to means of transport |
| 4 | Road tolls and road user charge |
| 5 | Travel expenses, such as taxi fares, public transport fares |
| 6 | Accommodation |
| 7 | Food, drink and restaurant services |
| 8 | Admission to fairs and exhibitions |
| 9 | Expenditure on luxuries, amusements and entertainment |
| 10 | Other |
Many EU member states will require sub-codes in addition to the main expenditure codes, to the extent that such information is necessary due to restrictions on the right to deduct in those member states.
Where applicable, these sub-codes will appear as completion options on the electronic portal.
Where code 10 is used, without an accompanying sub-code, a narrative description of the goods or services must be entered in a free text box, using the language required by the EU member state of refund.
If an invoice includes items covering more than one expenditure code, the code relating to the highest proportion of expenditure is the one that should be used.
2.11 Restrictions for partial exemption
You must apply the appropriate recovery rate for the goods or services purchased against each invoice or importation on your application, and show the amount of VAT recoverable in the appropriate box. The recovery rate to be applied is the last percentage appropriate to the refund period covering the invoice date. For example, if the claimable percentage for the March 2021 period is 5% and the application is submitted in April before the annual adjustment is calculated, the claim should be restricted to 5%.
If you only make one application at the year end, and have already calculated that the annual adjustment covering the March 2021 quarter is 3%, then you may only claim 3%.
Following your annual adjustment, you will not be required to amend refund applications already submitted. The invoices can only be entered once and the percentage to be used is that covering the invoice date.
2.12 Restrictions for non-business expenses
Expenditure incurred in an EU member state that relates to non-business activities is not claimable under the refund scheme.
2.13 Language for the application
EU member states generally require the application to be in their own language but with effect from 1 January 2010 they may allow the use of a second language in the free text fields, and English is a common option. The language required by the EU member state of refund will be displayed on the electronic portal as you complete the application.
2.14 Invoices that you may have to scan and submit electronically
Subject to the rules of the EU member state of refund you may be requested to submit invoices with values of 1,000 euros or more (250 euros or more in the case of fuel), or the equivalent in national currency, with the application. All other invoices should be retained as they may be requested at a later date by the EU member state of refund.
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.
The documents must be scanned and saved as files of PDF, TIFF, or JPEG format, and the total attachment size for each application must not exceed 5 megabytes. To keep your attachment size within this limit, you should scan the documents at the lowest resolution that still provides a legible copy, and you may include the document files in a ‘zip’ file. You cannot include ‘zip’ files within ‘zip’ files.
Where the UK tax authorities receive an attachment larger than 5 megabytes, containing ‘zip’ files within ‘zip’ files, or infected by a virus, they will remove and destroy the attachment. They will notify you if this happens.
2.15 Updates on your application
You will be informed electronically:
- if your application fails basic validation checks by the electronic portal (by an error message)
- when HMRC forwards your application to the EU member state of refund
- when the EU member state of refund receives the application
- if the EU member state of refund requires additional information from you
- when the EU member state of refund makes its decision
It’s essential that the email address you provide is correct and if this changes at any time before the application is decided, it must be amended at the earliest opportunity using the application correction procedures.
2.16 Time limits for submitting applications
Applications for the period 1 January 2020 to 31 December 2020 must be submitted to HMRC at the latest by 31 March 2021. The submitted application will only be considered if the applicant has completed all of the required standing data fields. Properly completed applications will be forwarded to the EU member state of refund who will be responsible for deciding the application.
2.17 Time limits to process the application by the EU member state of refund
The EU member state of refund must notify the applicant of its decision to approve or refuse the application within 4 months of the date they first received the application.
Where the EU member state of refund requires more information in order to decide the application, this will be requested by electronic means either from the claimant, from the competent authorities of the UK, or from third parties. Any request for additional information must be made within the 4-month period.
Where additional information is requested it should be supplied within 1 month of the date on which the request reaches the person to whom it’s addressed.
Once the EU member state of refund has received the additional information, it has a further 2 months in which to notify its decision.
If further additional information is requested by the EU member state of refund, the final deadline for making a decision can be extended up to a maximum of 8 months from the date they received the application. Payment must be made within 10 working days following expiry of the appropriate decision deadline.
2.18 How your claim will be paid
The refund will be paid in the EU member state of refund or, at the applicant’s request, in the UK or an EU member state. In the latter case, any bank charges for the transfer will be deducted by the EU member state of refund from the amount to be paid to the applicant.
If incorrect bank details are submitted by the claimant and they result in further bank charges being incurred, these will also be deducted from the amount payable on the current or subsequent applications. It is extremely important that you make sure that the bank details you supply are correct. If you change bank accounts whilst an application is pending you must make sure that these details are amended.
2.19 Correct an error on your application
The electronic portal provides a correction facility whereby you can recall the original application and amend existing details (including contact and bank details) and invoice lines. You may reduce an existing line to ‘nil’ (effectively deleting it), or substitute new invoice details for the existing ones – you cannot add new lines.
2.20 Penalties for errors on your application
The UK and EU member states take a very serious view of incorrect or false applications. Refunds claimed incorrectly on the basis of incorrect or false information can be recovered, and penalties and interest may be imposed and further refund applications suspended.
HMRC will not be able to intervene, this is a matter for the EU member state of refund. If your application is found to be incorrect after the refund has been paid, any over payment will be recovered, normally by deducting it from any subsequent refund.
2.21 Application refusal
If the EU member state of refund refuses an application fully or partly, they must also notify you of the reasons for refusal.
If this happens you can appeal against the decision using the appeals procedure of that EU member state. This means that the normal VAT appeals rules of that EU member state on time limits, form of appeal and so on, will apply.
If the EU member state of refund has not notified its decision within the appropriate decision deadline, you should consider that the application has been rejected unless any alternative procedures apply in that EU member state. HMRC cannot intervene on your behalf.
2.22 Interest if the payment is delayed
Interest may be payable to you by the EU member state of refund if payment is made after the deadline. If applicable, it will be paid from the day following the deadline up to the date the refund is actually paid. Interest rates must be the same as those applied to refunds of VAT to taxable persons established in the EU member state of refund under the national law of that EU member state.
If no interest is payable under national law for refunds to established taxable persons, the interest payable will be equal to the interest or equivalent charge which is applied by that EU member state for late payments of VAT by taxable persons.
VAT incurred on or after 1 January 2021
From 1 April 2021 UK businesses will no longer have access to the EU electronic portal. VAT incurred on expenses in the EU on or before 31 December 2020 must be submitted by 31 March 2021.
UK and Isle of Man businesses will still be able to claim refunds of VAT from the EU after the end of the transitional period but they will have to use the existing processes for non-EU businesses. This process varies across the EU so you will need to follow the procedure set out by the country from which you’re making the claim. UK businesses may be required to provide a certificate of status in order to get a refund.
You can find further information about claiming VAT refunds from EU countries on the EU Commission’s website.
3. Transitional rules for refunds of UK VAT to EU businesses at the end of the transition period
3.1 Introduction
This section applies to EU businesses who want to claim a VAT refund on expenditure incurred in the UK on or before 31 December 2020.
EU businesses who want to claim a VAT refund on expenditure incurred in the UK on or after 1 January 2021 should refer to section 4.
3.2 What are the changes
Following the UK’s exit from the EU on 31 January 2020, the UK entered into a transition period until 31 December 2020. During this period, EU businesses that incurred VAT on expenditure in the UK before the end of the transition period can still make a claim under the provisions of Part 20 of the VAT Regulations 1995 (SI 1995/2518) subject to the terms of the Withdrawal Agreement.
The legislation that implements the changes arising from the Withdrawal Agreement is contained in The VAT (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (SI 2020/1495) Part 3.
3.3 Claims to be considered for refund
The following claims are covered by the changes of the Withdrawal arrangements:
- claims made on or before 31 March 2021 which relate to VAT incurred on expenses for 1 January 2020 to 31 December 2020
- claims that have been submitted on or before 30 September 2020 which are still being processed and yet to be refunded as at 31 December 2020
3.4 Who can apply
You must be a taxable person established in a member state of the EU.
You must meet the following conditions:
- you must not be registered, liable or eligible to be registered in the UK
- you must not have any place of business in the UK or in the Isle of Man
- you must not make any supplies in the UK (other than transport services related to the international carriage of goods, or goods and services where VAT is payable by the person to whom the supply is made)
If you use an agent to submit your application or receive payment of refunds on your behalf, you must submit a letter of authority, in hard copy, to the UK Overseas Repayment Unit. An acceptable form of words for the letter of authority is given at paragraph 5.5.
3.5 Submit your application
This statement has force of law
Applications by an EU business which are submitted to the UK on or before 31 March 2021, must be made through the electronic facility provided by the tax authority in your EU State for either:
- a refund of VAT incurred in the refund periods specified in paragraph 3.6 of this Notice
- an adjustment to a previously submitted refund claim that is still within the time limit for adjustment specified in paragraph 3.7 of this Notice
3.6 Refund application periods
The period covered by your application is known as the ‘refund period’. For the purpose of the end of the transition period, the refund period is 1 January 2020 to 31 December 2020.
3.7 Time limits for submitting an application
Your application must be submitted through the electronic facility in your EU state by 31 March 2021 for VAT incurred from 1 January 2020 to 31 December 2020
If you make both taxable and exempt supplies, you may need to make an adjustment to your previous year’s claim (see paragraph 3.11). The time limit for making these adjustments is 31 March 2021 for an adjustment relating to period 1 January 2019 to 31 December 2019.
3.8 Claim limits
There is no maximum limit.
The minimum limits are:
- £295 where the application covers less than a calendar year but not less than 3 calendar months
- £35 where the application covers a calendar year or the remainder of a calendar year
3.9 Goods and services you can and cannot claim VAT on
You can claim VAT on goods and services purchased during the refund period, and VAT on goods imported into the UK during the refund period.
You cannot claim:
- amounts of VAT that have been incorrectly invoiced, or where VAT has been charged on the dispatch of goods to another member state, or the export of goods outside the EU (you must take this up with the supplier)
- VAT on the purchase of a motor car
- VAT on goods and services used for business entertainment – as an exception, VAT on entertainment for overseas customers may be reclaimed but only if it is of a very basic nature
- VAT on goods and services used for non-business activities In addition, where you incur VAT on charges for hiring or leasing a motor car, you can only claim 50% of the total VAT charged.
Where you are required to repay overclaimed VAT, you will be required to remit and submit the claim by 31 March 2021 using the electronic portal system. If you are unable to use the electronic system, you must remit the claim using VAT Declaration form which will be made available on GOV.UK.
3.10 Restrictions for non-business expenses
Expenditure incurred in the UK that relates to non-business activities cannot be claimed under the refund scheme.
3.11 If you make both taxable and exempt supplies
You must apply the appropriate restriction to the VAT you reclaim, following the rules that apply in your own country.
If your country operates the ‘pro-rata’ system for taxable and exempt supplies, and your pro-rata rate changes from one year to the next, you should submit a pro-rata adjustment through your tax authority’s electronic facility. If you need to make a pro-rata adjustment to your claim for the period 1 January 2019 to 31 December 2019 this adjustment must be made by 31 March 2021.
If you make a pro-rata adjustment after 31 March 2021, you can make an adjustment under the procedure in paragraph 3.19.
3.12 Information you must show on your application
The electronic facility provided by your tax authority will contain fields for completion, and you should direct any detailed queries about input of data to the facility to your tax authority.
As a guide, the following information is required on each refund application:
- your name and address
- an address for contact by electronic means (an email address)
- a description, using NACE codes, of your business activity for which you have purchased the goods and services
- the start and end dates of the refund period covered by the application
- a declaration that you have not made any supplies of goods or services in the UK during the refund period (except for those specified in paragraph 3.4
- your VAT identification number or tax reference number
- your bank details including your IBAN and BIC
In addition, you must provide the following details for each purchase or importation included in your application:
- the name and full address of the supplier
- the VAT registration number of the supplier in the UK, including the prefix ‘GB’ (except in the case of imports)
- the date and number of the supplier’s invoice or the importation document
- the taxable amount and the amount of VAT on the invoice, expressed in pounds sterling
- the amount of VAT deductible for the purchase or importation, expressed in pounds sterling
- where applicable under the rules of your EU member state, the appropriate pro-rata rate
- a description of the goods and services purchased or goods imported, using the codes in paragraph 3.13
3.13 Codes and sub-codes for goods and services required on refund applications
Use the codes in this section to describe the nature of the goods or services to reclaim.
Code 1: Fuel
Sub-code 1.6 Fuel purchased for resale
Code 2: Hiring of means of transport
Sub-codes:
- 2.2 Hiring of means of transport with a mass less than or equal to 3.500kg other than means of transport for paying passengers
- 2.4 Hiring of means of goods transport
- 2.5 Hiring of passenger and multipurpose cars
- 2.5.1 Used exclusively for business purposes
- 2.5.2 Used partly for commercial passenger transport or driving instruction
- 2.6 Hiring of motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1.550kg
- 2.6.1 Used for commercial passenger transport or driving instruction
- 2.6.2 Used for other business purposes
- 2.7 Hiring of passenger cars of the M1 category
- 2.9 Hiring of means of passenger transport with less than 9 spaces
- 2.9.1 Used for commercial operations
- 2.9.2 Used for other than commercial operations
Code 3: Expenditure relating to means of transport (other than goods and services referred to under codes 1 and 2)
Sub-codes:
- 3.2 Expenditure relating to means of transport with a mass less than or equal to 3.500kg other than means of transport for paying passengers
- 3.2.1 Purchase of means of transport with a mass less than or equal to 3.500kg other than means of transport for paying passengers
- 3.2.2 Maintenance of a means of transport with a mass less than or equal to 3.500kg other than means of transport for paying passengers
- 3.2.3 Purchase and installation of accessories for a means of transport with a mass less than or equal to 3.500kg other than means of transport for paying passengers
- 3.4 Expenditure relating to means of goods transport
- 3.4.1 Purchase of a means of goods transport
- 3.4.2 Maintenance of a means of goods transport
- 3.5 Maintenance of passenger and multipurpose cars
- 3.5.1 Used exclusively for business purposes
- 3.5.2 Used partly for commercial passenger transport, driving instruction, or rental purposes
- 3.6 Maintenance, of motorcycles, caravans and vessels for recreational and sports purposes, and aircrafts with a mass greater than 1.550kg
- 3.6.1 Used for commercial passenger transport, driving instruction, rental purposes
- 3.6.2 Used for other business purposes
- 3.7 Expenditure, other than maintenance, garaging and parking relating to passenger and multipurpose cars
- 3.7.1 Used exclusively for business purposes
- 3.7.2 Used partly for commercial passenger transport, driving instruction or rental purposes
- 3.8 Expenditure, other than maintenance, garaging and parking relating to motorcycles, caravans and vessels for recreational and sports purposes, and aircrafts with a mass greater than 1.550kg
- 3.8.1 Used for commercial passenger transport, driving instruction, rental purposes or resale
- 3.8.2 Used for other business purposes
- 3.9 Purchase of passenger car of ‘M1’ category
- 3.10 Purchase of accessories for passenger cars of ‘M1’ category, including their assembly and installation
- 3.12 Expenditure relating to means of passenger transport with less than 9 places used for commercial operations
Code 4
Code not in use
Code 5: Travel expenses, such as taxi fares, public transport fares
Sub-codes:
- 5.1 For the taxable person or an employee of the taxable person
- 5.2 For someone other than the taxable person, or an employee of the taxable person
- 5.3 For the taxable person or an employee of the taxable person in the context of a conference, fair, exhibition or congress
- 5.3.1 For the organiser of the event
- 5.3.2 For a participant in the event, where the expenditure is directly charged by the organiser
Code 6: Accommodation
Sub-codes:
- 6.1 Expenditure on lodging and accommodation for the taxable person, or an employee of the taxable person
- 6.2 Expenditure on lodging and accommodation for someone other than the taxable person or an employee of the taxable person
- 6.4 Expenditure on lodging and accommodation for the taxable person or an employee of the taxable person in the context of a conference, fair, exhibition or congress
- 6.4.1 For the organiser of the event
- 6.4.2 For a participant in the event, where the expenditure is directly charged by the organiser
- 6.6 Expenditure on lodging and accommodation for onward supply
Code 7: Food, drink and restaurant services
Sub-codes:
- 7.1 Food and drink provided by hotels, bars, restaurants and boarding houses, including breakfast
- 7.1.1 For the taxable person or an employee of the taxable person
- 7.1.2 For someone other than the taxable person or an employee of the taxable person
- 7.2 Food and drink provided in the context of a conference, fair, exhibition or congress
- 7.2.1 For the organiser of the event
- 7.2.2 For a participant in the event, where the expenditure is directly charged by the organiser
- 7.4 Restaurant services purchased for onward supply
Code 8: Admissions to fairs and exhibitions
Sub-codes:
- 8.1 For the taxable person or an employee of the taxable person
- 8.2 For someone other than the taxable person or an employee of the taxable person
Code 9: Expenditure on luxuries, amusements and entertainment
Sub-codes:
- 9.1 Purchase of alcohol
- 9.2 Purchase of manufactured tobacco
- 9.3 Expenditure on receptions and entertainment
- 9.3.1 For publicity purposes
- 9.3.2 Not for publicity purposes
- 9.4 Expenditure on maintenance of pleasure craft
- 9.5 Expenditure on works of art, collectors’ items and antiques
- 9.6 Expenditure on luxuries, amusements and entertainment for advertising
- 9.7 Expenditure on luxuries, amusements and entertainment other than 9.1, 9.2 and 9.3
Code 10: Other
If you enter code 10, with no accompanying sub-code, you must provide a free text description of the goods or services in English.
Sub-codes:
- 10.1 Tools
- 10.2 Repairs within a warranty period
- 10.3 Services connected with education
- 10.4 Work on property
- 10.4.1 Work on immoveable property
- 10.4.2 Work on immoveable property used as a dwelling
- 10.4.3 Work on moveable property other than code 3
- 10.5 Purchase or hiring of property
- 10.5.1 Purchase or hiring of immoveable property
- 10.5.2 Purchase or hiring of immoveable property used as a dwelling
- 10.5.3 Purchase or hiring of moveable property other than code 2
- 10.6 Provision of water, gas or electricity through a distribution network
- 10.7 Gifts of a small value
- 10.8 Office expenses
- 10.9 Participation in fairs and seminars, education or training
- 10.9.1 Fairs
- 10.9.2 Seminars
- 10.9.3 Education
- 10.9.4 Training
- 10.10 Flat rate additions on livestock and agricultural produce
- 10.11 Expenditure on postage of mail to countries outside the UK and EU
- 10.12 Expenditure on fax and phone in connection with accommodation
- 10.13 Goods and services acquired by a travel organiser for the direct benefit of the traveller
- 10.14 Goods purchased for resale other than 1.6
- 10.15 services purchased for resale other than 6.6 and 7.4
- 10.16 Work on property
- 10.16.1 Work on immoveable property used as a residence, recreational or leisure facility
- 10.16.2 Work on immoveable property other than 10.16.1
- 10.16.3 Work on moveable property connected with or use of an immoveable property in 10.16.1
- 10.16.4 Work on moveable property other than 10.16.3
3.14 Documents you must send with your application
You must attach copies of all invoices and import documents where the taxable amount exceeds:
- £200 in the case of fuel
- £750 in the case of all other goods and services
The documents must be scanned and saved as files of PDF, TIFF or JPEG format, and the total attachment size per application must not exceed 5 megabytes. In order to keep your attachment size within this limit, you should scan the documents at the lowest resolution that still provides a legible copy, and you may include the document files in a ‘zip’ file. You cannot include ‘zip’ files within ‘zip’ files.
Where the UK tax authorities receive an attachment larger than 5 megabytes, containing ‘zip’ files within ‘zip’ files, or infected by a virus, they will remove and destroy the attachment. They will notify you if this happens.
To prevent this happening, if the attachment size would exceed 5 megabytes, remove lower value invoices to reduce the attachment size to an acceptable limit for submitting. If we require copies of further invoices, we will ask for them separately.
The UK recommends TIFF or PDF format at 200 DPI.
3.15 After you have submitted your application
We will advise you within 4 months of the date you submitted your application for refund whether your application has been accepted, partly or wholly rejected, or further information is required. If we ask for further information (which may take the form of original invoices or other documents), you must supply this within 1 month of the date on which you receive the request. We will then have a maximum period of 8 months from the date we received your application, to notify you of our decision.
Where we are unable to verify that you are registered for business in your own country we may need to ask you to provide proof of your business status.
3.16 When you will receive payment
Unless your application has been wholly rejected, you will receive payment of any amount due to you within 10 working days of the decision deadlines set out in paragraph 3.15. Payment will be made in pounds sterling, to the bank account detailed in your application, so it is important that the account details are correct.
3.17 Interest if the payment is made late
If you do not receive payment by the deadlines set out in paragraph 3.15 (and provided you have supplied any additional information requested within the required timescales) you will be paid interest. Interest will be calculated at the same rate applied to taxable persons within the UK, and the interest calculation period will run from the date payment was due until the date it is made.
3.18 Application refusal
Your application can be refused but we will tell you why we have refused it.
If you do not agree with the decision to refuse your application, 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, giving 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 find further information here about appeals and reviews.
3.19 Correct an application after it’s been submitted
HMRC will accept corrected applications but these must be submitted by the same deadline as original applications, which is by 31 March 2021, following the year in which the VAT was incurred.
If you find an error in a claim, you have already submitted for the period 1 January 2020 to 31 December 2020 you must make an adjustment for either an under or an over claim using the procedure for refunding VAT to businesses established outside UK in section 5.
The deadline to notify HMRC and submit any adjustments is 31 December 2021.
We may impose penalties for applications which are found to be incorrect, so if you realise that you have made an error on an application after it has been submitted, you should submit a correction as soon as possible.
3.20 Incorrect claims
We take a very serious view of incorrect applications. Refunds obtained on the basis of any incorrect application can be recovered, penalties and interest may be imposed and further refund applications suspended. If your application is found to be incorrect after your reclaim has been paid, any overpayment will normally be deducted from your next refund.
4. 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 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.
4.1 Who can apply
If you’re registered for business purposes in a country outside the UK, you can use the scheme to reclaim VAT paid in the UK, provided that 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: should I be registered for VAT
- 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 services 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, but 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 in the UK on or before 31 December 2020 then please refer to section 3.
4.2 Goods and services you can reclaim VAT on
You cannot use the scheme to reclaim VAT on:
- non-business supplies, but 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 United Kingdom
- 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, such as 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, such as 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 United Kingdom, (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)
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.
4.3 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 see Notice 706: partial exemption.
4.4 VAT paid on imports
If you have to arrange for goods to be imported 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. If you’re importing goods into the UK you’ll find more about this in Notice 702: imports.
4.5 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.
4.6 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 ensure fair treatment for all claimants, applications are dealt with on a ‘first come, first served’ basis and that the time limit is applied strictly.
5. How businesses established outside the UK can claim refunds of UK VAT
5.1 Application form
You make your application on form VAT 65A.
The following statement has the force of law.
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.
5.2 Certificate proving your business activity
5.2.1 Information that the certificate must contain
When you make your first application you must also include a certificate 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, 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 style, the certificate must show this as well as the name of the person registered.
The certificate must contain:
- the name, the address and official stamp of the authorising body
- your own name and address (see paragraph 5.2.3 if you have a PO Box address)
- the nature of your business
- your business registration number
It must be an original certificate, a photocopy is not acceptable.
You may use form VAT 66A.
The following statement has the force of law.
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.
5.2.2 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 has an online validation system that HMRC can access to verify that you’re in business.
We cannot accept e-CoS electronically so you must submit a copy of the e-CoS with your paper refund application.
5.2.3 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 CoS and it is unclear whether the address is that of a business establishment, or a mailing address, we will request further documentary evidence to establish that this is the place where your business is established.
5.3 Length of the certificate
Each certificate is valid for 12 months from its date of issue and will cover any applications you make during that year. Once the certificate has expired you’ll need to send a new one with your next application.
5.4 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.
You must provide the originals of all invoices and import documents with your application. Copies are not acceptable.
5.5 Who can apply
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)’
5.6 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.
The UK authorities take a very serious view of false applications. Refunds obtained by means of a false application can be recovered, and penalties may be imposed.
5.7 Method of Payment
Payment can be made directly to your own bank through either:
- SWIFT (Society for Worldwide Inter-Bank Financial Telecommunications)
- to 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 ensure 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 £ 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.
5.8 Application refusal
If we refuse your application we’ll tell you why.
If you do not agree with the decision to refuse your application, 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, giving your reasons why you do not agree with the decision. We’ll 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 find further information about appeals and reviews.
Your rights and obligations
Read Your 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.
Last updated 9 February 2021 + show all updates
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Updated information on the law that relates to this guidance.
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First published.
