background image
UK HMRC Issues Revenue and Customs Brief on Delayed VAT Repayments to Overseas Businesses Due to COVID-19 — Orbitax Tax News & Alerts

UK HMRC has issued Revenue and Customs Brief 9 (2020), regarding a delay in VAT repayment to overseas business due to the impact of COVID-19.


Revenue and Customs Brief 9 (2020): delayed VAT repayments to overseas businesses

1. Purpose of this brief

This brief informs overseas businesses that are not established in the EU of the current delay in processing and refunding VAT claims submitted under the Overseas Refund Scheme. The affected claims are those within the prescribed year 1 July 2018 to 30 June 2019, submitted on or before 31 December 2019.

The brief also sets out what businesses need to do if they are unable to obtain a certificate of status for the prescribed year 1 July 2019 to 30 June 2020.

2. Who should read this brief

You should read this brief if you are:

  • a non-EU business
  • an agent acting on behalf of a non-EU business
  • a body or association representing the interests of businesses and advisers in relation to international VAT

3. Background

On 23 March 2020, the government advised working from home wherever possible. In line with the government's guidelines, HMRC has had to balance the need to keep our usual services running with that of ensuring a safe working environment for our staff. This has affected some of our operational processes, including the processing of overseas VAT reclaims.

As set out in VAT Notice 723A, paragraph 6.6, HMRC's objective is to process and refund overseas VAT claims within 6 months of the submission deadline of 31 December.

Due to the impact of coronavirus (COVID-19) and the changes HMRC have had to make, we are unable to meet this deadline for some of the 2018-19 claims.

4. Next steps

HMRC has put structures in place to allow us to continue to deliver services and process claims as quickly as possible. We expect to pay valid 2018-2019 claims by 30 September 2020.

HMRC will write to you if your VAT claims will not be paid by 30 September 2020 either because further information is needed or for any other reason.

5. Claims for 1 July 2019 – 30 June 2020

HMRC are aware that some overseas businesses or their agents and advisers may not be able to obtain the required certificate of status from their official issuing authorities due to measures taken by jurisdictions in response to coronavirus.

If you've submitted your VAT refund claim without a certificate of status, your claim will not be rejected but it will be put on hold until 31 December 2020. This is the deadline for submitting your application for VAT refunds and all the required documents, which include the certificate of status.

If, in these circumstances, you are not able to obtain the relevant certificate of status by 1 October 2020, write to us to let us know and we will consider the specifics of your case.

If you are likely to make a claim before 31 December 2020, you should request a certificate of status as early as possible. You should also let us know as soon as possible if you are unlikely to be able to obtain a certificate of status before 31 December 2020.

6. More information

Contact the UK VAT Overseas Repayment Unit if you have a query about an application you have sent to them.