Overseas VAT Claims

When a VAT registered business sends its employees or directors on business trips to other EU countries, those individuals will incur expenses such as; hotel accommodation, restaurant meals and car hire. The VAT element of those expenses cant be reclaimed on the business’s UK VAT return, because the VAT incurred is overseas VAT not UK VAT.

The UK business can only claim a refund of the overseas VAT by way of an online claim made through the HMRC VAT online service.

The refund claims can be made for periods of not less than three months, in which case the minimum claim is 400 euros or equivalent in local currency. Where one claim is submitted for the calendar year the minimum permitted claim is 50 euros or equivalent in local currency. Claims for the calendar year to 31 December 2015 must be submitted by 30 September 2016, late claims are not permitted.

Don’t assume that every EU country has the same rules about non-refundable VAT as the UK. ¬†For example, in the UK VAT on business entertaining expenses can’t be reclaimed; in other countries a block on reclaiming road fuel or accommodation may apply. You may need to research the VAT rules for each country for which you submit a claim.

Generally, you wont be required to submit invoices for the expenses with the refund claim, but those invoices must be retained. Some member states will request a scan of invoices with values over 1000 or more, or more than 250 for fuel.

It takes up to four months for the refund claim to be processed.