A business can only claim UK VAT charged on the UK VAT return. If your client has suffered VAT in another EU member state, he will need to check if he is eligible to claim a refund of the VAT from that member state. To be eligible for a refund a business must be a taxable person registered for VAT in the UK or in the Isle of Man, and additionally:
- must not be registered, liable or eligible to be registered in the Member state where the VAT was charged;
- must not have a fixed establishment in the member state where the VAT was charged, and
- during the refund period must not have supplied any goods or services in that member state, with the exception of transport and ancillary services and goods or services where the VAT is payable by the recipient of the goods or services
As each member state has discretion over its VAT rates and also to restrict recovery of input tax on certain supplies, the recovery will depend on the particular rules that member state. For example, whilst the UK blocks input tax on business entertainment, it may be that another member state blocks input tax on taxi fares. The member state to which the claim is made will refuse repayment on any such items but should advise the reason for the refusal. The following link takes you to the relevant section of the Europa website where you can check the rules specific to the member state in question. https://europa.eu/youreurope/business/taxation/vat/vat-refunds/
It is also important to remember that if your client has a restriction on recovery of input tax because of partial exemption, then he should only recover the restricted amount on their EU refund claim.
Your client should submit the refund claim online within the Government Gateway portal where he would access the online VAT services. The return period cannot exceed one calendar year and cannot usually be less than three months. It may be less than three months if it covers the remainder of a calendar year where a business has already made interim applications, or where a business has recently registered. If a business is making a claim for a period of less than one calendar year then the claim has to be for 400 euro or more. If the claim is for a calendar year or remainder of a year, then the minimum amount of the claim is 50 euro. The deadline for submitting a claim is 30 September of the calendar year following the year of claim.
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If you have a VAT query why not contact the VAT Advice Line on 0844 892 2470 to discuss the implications. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
