Making a VAT claim from both HMRC and overseas tax authorities

Is it a waste of time if a UK business seeks to reclaim VAT – or its indirect tax equivalent – paid in another EU or non-EU country? And what is the situation if you act for an overseas business that pays UK VAT and it wants to reclaim it from HMRC? Has the process become more hazardous than a whippet running on an ice-rink in the post-Brexit world in which we operate? I’ll seek to answer these questions in this article. Read on.

Reciprocal arrangement

The starting point is that an overseas VAT claim can only be made in most cases if the UK regulations also allow businesses in that country to reclaim VAT from HMRC. This is commonly described as a ‘reciprocal arrangement’ or – in layman’s terms – a ‘give-and-take’ relationship. To give an easy example a UK business can claim Australian goods and services...