Reclaiming VAT on Purchases Made Abroad

reclaiming VAT on EU purchases

Many of you must have experienced the intention to buy something useful for your business even when you are on a holiday abroad. This is because the product or service is something that you have been looking for a very long time but could not find in the UK. You decide to buy the product for your business anyway. Now the next thought that might come to your mind is whether I can reclaim the foreign VAT on this purchase and the VAT that you have just paid. Well having a good awareness of reclaiming VAT on EU purchases will help you to make the right choice here.

This sometimes happens because you have not experienced buying things from abroad for business purposes. Or you are totally unaware of the process to go about VAT reclaiming on the purchases. We are here to help you ensure that you do not miss out on any recovery. For this purpose and to answer the relevant queries, we have compiled this comprehensive guide that will cover the discussion on what is the procedure for reclaiming VAT on EU purchases, how to buy products and services in the EU, what is the exact VAT that you can reclaim, and how to use the EU VAT refund service for your ease. Let’s get delved further into the discussion.


Accounting firms can assist you in managing your reclaiming VAT on EU purchases and avail maximum tax relief possible. Let’s talk to one of our professionals or tax advisor.


What is the Procedure for Reclaiming VAT on EU Purchases?

It is possible to reclaim VAT on purchases you have made in the EU. You can simply do it by getting direct with HMRC for the purpose of reclaiming VAT. However, you need to be aware of the fact that this process will be different from the UK VAT returns that you can do in your quarterly returns. The procedure is different from the usual scenario, however, it is a straightforward method that you can even do online. However, there are certain conditions to follow in order to make a successful claim. These conditions are outlined below:

  • Your business must not sell any services or products there.
  • Your business should not have any establishments in that country.
  • Your business should not be eligible for VAT or registered in the country where the seller’s business is based.

Moreover, there are certain things to be considered for your claim to be accepted by HMRC. These are mentioned in the following:

  • The claim must belong to a period of purchase that is not older than the period of a year.
  • The claim must be for a minimum period of three months.
  • The claim must be submitted by the end of September and the same tax year must be followed.


Products and Services in the EU

In previous years for the goods or services you have purchased abroad, the amount of VAT reclaim was only possible to get if you get in touch with the tax authorities of the same country to begin the reclaim. For this, you would have to be registered for VAT in the same country and several people would leave the option because of the chaos and such a long process.

In case of not getting registered, the alternative option was to use the process of a stand-alone claim to get the VAT reclaim approved. This process was very slow and cumbersome. To make the process earlier in the year 2010, HMRC introduced the EU VAT refund service to benefit people abroad.


What VAT can You Reclaim?

With the help of the EU VAT refund service, you are able to submit an online claim and ask for a foreign VAT refund. This is to be done with HMRC rather than getting in touch with the tax authorities in the EU countries. However, there are several examples where people are not able to comprehend the rule and regulations of making such a claim and make incorrect claims often. Because of this misunderstanding, the claims are often rejected by HMRC as well.


How to Use the EU VAT Refund Service?

You can use the EU VAT refund service for the products or services you have purchased for the sake of your business benefit. Now, these purchases are made in another country that comes under the EU. This process can even help you to cover the services you availed there for business purposes. This can include the services that you do not bring back to the UK like car hire and hotel bills.

However, there are conditions to be followed to get the claim accepted by HMRC. The period of the claim should not be more than the period of twelve months. Moreover, if your case’s period is more than three months but less than twelve months, you can make a claim for a VAT amount of £400 or more than this figure.


The Bottom Line

Now that we have gathered a fair amount of information about reclaiming VAT on EU purchases, we can bring the discussion towards wrapping up. With the use of the EU VAT service, the process of reclaiming VAT paid on the services or products in the EU countries has gone easier for people. In previous years, the process was so difficult to understand and follow that people would rather prefer to leave it. However, the condition is a must to follow in order to make your claim successful and accepted by HMRC. We hope these few minutes of reading will help you to develop a better understanding of reclaiming VAT on EU purchases in the UK.


We are committed to delivering exceptional accounting services to our valuable clients in the UK to ensure they get the most professional solution to queries about reclaiming VAT on EU purchases in the UK.


Disclaimer: All the information provided in this article on reclaiming VAT on EU purchases in the UK, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.