(scotland) Limited
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It's now that time of the year again when businesses consider what European VAT they can recover ahead of the annual filing deadline.

As a summary, businesses can recover VAT they have incurred in other EU Member States by making a claim under the EU electronic VAT refund claim procedure.

Businesses and organisations registered for VAT in the UK have until 30 September 2016 to reclaim VAT which they have paid in another EU Member State(s).

The conditions for reclaiming VAT paid in another jurisdiction in the EU include:

  • the UK business must not be registered, liable or eligible to be registered in the EU Member State(s) from which it is claiming the refund;
  • the UK business must have no fixed establishment, seat of economic activity, place of business, or other residence there; and
  • during the refund period, the UK business must not have supplied any goods or services within the EU Member State(s) of refund, with the exception of transport services and services ancillary to it, or goods and services where VAT is payable by the person to whom the supply is made.

There is a wide variety of goods and/or services on which businesses are entitled to recover VAT. Typically, our experience is that hotel accommodation and subsistence costs are the main costs incurred by UK businesses when meeting associated businesses, potential or existing customers and suppliers, or management and employees attending overseas conferences, seminars, trade shows and other marketing opportunities.

In relation to input tax (VAT) deduction by UK business making claims in the other EU Member States, the same rules for VAT recovery will apply as they do for businesses registered in those local EU Member State(s). However, the rules of what VAT can be recovered differ from one EU Member State to another.

As mentioned above, the EU VAT refund claims must be submitted by 30 September 2016. Consequently, a UK business must make its electronic refund claim via the UK Government Gateway, or through HMRC's VAT online services. The claim cannot be for a period of more than a calendar year (i.e. must be within 1 January 2015 to 31 December 2015), or less than three months unless, for the latter, that is all that remains of the 2015 calendar year. The business can include in its claim any items missed on earlier claims, provided they relate to VAT charged in the calendar year (i.e. 2015) it is claiming for.

The EU VAT refunds service requires registration and enrolment before the business can make the first claim online and requires an activation code that HMRC sends out by post. However, a number of businesses prefer to use an agent to submit their claims, which requires the agent to register and enrol to use the HMRC VAT for Agents Service and all is required is for the business to authorise the agent to submit claims on the business' behalf.

Claims are completed online and if the business needs to enter any notes when filling the online claim then it must be in a language accepted by the EU Member State the business is claiming from. This information will be available on screen.

As it is an online system, the business does not need to send any paper invoices or other documents to the other EU Member States when submitting the claim. However, some local Tax Authorities may ask the business to scan invoices over certain values and attach these to the claim. The business will not normally be asked to send scanned documents for purchases with a value less than €1,000 or €250 for fuel purchases. However, the business must keep all of the original invoices and other documents supporting its claim as some EU Member States may occasionally request sight of the original documents later in order to authorise the claim.

Who is potentially affected?
UK VAT registered businesses that have incurred VAT in any of the other 27 EU Member States.

How can VAT Services (Scotland) Ltd help you?
We have significant experience of submitting EU VAT refund claims and would be delighted to assist your business to make its claims for the calendar year 2015, prior to the deadline of 30 September 2016.

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.

Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
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