HMRC have announced that businesses will not be able to use HMRC’s VAT online services to claim a VAT refund from an EU member state after 5pm on 31 October 2019.
Many UK businesses will incur VAT in the EU in the course of their business, for example, attending events in the EU or travelling to visit clients, contacts or colleagues. As this VAT cannot be claimed on the UK VAT return, businesses will seek to claim this VAT through the EU VAT refund scheme. The deadline for submitting EU refund claims is 30 September of the following year and therefore any VAT incurred in 2018 can be claimed in the normal way as we will still be part of the EU on 30 September. However access to the EU refund scheme will cease at 5pm on exit day which causes an issue for VAT incurred in 2019.
Once we leave the EU, businesses will need to submit claims through the process for non-EU businesses. The deadline for VAT incurred in 2019 would be 31 December 2020. However, the claim year for non-EU businesses is 1 July to 30 June whereas the claim year for EU businesses is 1 January to 31 December, so there is a risk that VAT incurred 1 January 2019 to 30 June 2019 may be lost. It is therefore recommended that a claim is submitted for VAT incurred in the first 6 months of 2019 using the EU business route prior to 5pm on 31 October 2019.
It should be noted that the refunds for non-EU businesses are made directly to the country where the VAT was incurred, and each country will have its own process and requirements.