UK VAT Refunds for Non-UK Businesses 2026/27 — VAT Groups

A business established outside the UK may be able to reclaim UK VAT paid on qualifying UK purchases or imports through the overseas VAT refund scheme. The key conditions are that the business is established for business purposes outside the UK, is not UK VAT registered or required to register, has no UK place of business and does not make ordinary supplies in the UK that take it outside the scheme.

The important VAT-group rule is easy to miss: the business that incurred the VAT must submit the claim. The representative member of a VAT group can claim only VAT incurred by that representative member. The claim must also list the full business names of all VAT group members during the application period. HMRC's VAT Notice 723A was updated on 8 September 2026 and is the controlling source for the process.

Who can use the overseas VAT refund scheme?

The scheme is designed for businesses registered for business purposes in a country outside the UK. The business must also meet the UK conditions. In practical terms, check all of these points before preparing a claim:

• the claimant is established outside the UK;
• it is not registered, liable or eligible to be registered for UK VAT;
• it has no UK place of business or other UK residence for the purpose of the notice;
• it does not make ordinary supplies in the UK, apart from the limited exceptions HMRC lists; and
• its home country allows a comparable refund or concession for UK businesses, subject to HMRC's reciprocity condition.

The question is not simply whether the business has a foreign VAT number. A company can be incorporated overseas but operate from a UK establishment or make supplies that require UK VAT registration. If that is the position, the overseas refund route may not be available. Review HMRC's VAT registration guidance before treating a refund claim as the correct route.

An overseas business that imports goods may also be able to reclaim import VAT, but the owner of the goods must make the claim. If the import activity makes the business liable to register for UK VAT, the non-UK refund scheme is no longer the appropriate solution.

The VAT-group rule

VAT groups should map each invoice to the legal entity that incurred the VAT. HMRC's updated notice says the business that incurred the VAT must submit the claim. The representative member may claim VAT that it incurred, but it cannot simply consolidate every group company expense into one claim under the representative member's name.

The application must include the full business names of all VAT group members during the application period. This means the group should keep a membership timeline, not only a current group certificate. If a company joined or left the group during the 12-month period, preserve the relevant legal name and dates so the claim identifies the correct members.

Do not treat the VAT group as a separate company for every refund purpose. The group relationship may affect VAT accounting, but it does not erase the identity of the entity that paid and incurred the UK VAT.

What UK VAT can be reclaimed?

During the refund period, qualifying UK VAT can include VAT on goods and services purchased in the UK and VAT on goods imported into the UK. The expenditure must be used for the business and satisfy the ordinary recovery boundaries.

The notice excludes or restricts several categories. Examples include:

• goods or services used for non-business activity, except the business element of a mixed supply;
• supplies used or intended to make a supply in the UK;
• most ordinary business cars, subject to the specific leasing restriction HMRC describes;
• certain second-hand goods where no VAT invoice is issued;
• business entertainment and hospitality, subject to the narrow overseas-customer exception;
• exported goods where the supplier should instead apply zero rating with the required evidence;
• goods and services bought for resale for the direct benefit of travellers; and
• supplies used to make an exempt supply outside the UK.

Partial exemption can also restrict recovery. If a cost supports both taxable and exempt supplies, the business may recover only the taxable-use proportion. Use HMRC's partial-exemption notice for the detailed method rather than treating a valid invoice as proof that the full VAT amount is refundable.

Prescribed year, minimum claim and deadline

The prescribed year is the 12 months from 1 July to 30 June of the following calendar year. An application cannot normally cover more than one prescribed year or less than three calendar months, unless the period is the remaining part of the prescribed year.

The minimum claim depends on the period covered:

The application deadline is 31 December following the end of the prescribed year. HMRC says the deadline is applied strictly and claims are dealt with on a first-come, first-served basis. A business preparing a claim for the prescribed year ending 30 June 2026 should therefore plan for the 31 December 2026 deadline.

Do not leave certificate collection or group-member reconciliation until the final week. If electronic SDES access is needed, HMRC says a business that has not registered and wants to submit electronically by the deadline must request access by 30 November.

VAT65A, certificate of status and invoices

The standard application is the VAT65A. The schedule at question 9 must be typed rather than handwritten. The first application also requires a certificate of status from the official authority in the country where the claimant is established. HMRC may accept an electronic certificate when the issuing authority has an online validation system it can access.

The certificate should identify the business name and address, the nature of the business and the business registration number. If supplier invoices use a trading name, ask the certificate issuer to include enough information to connect the trading name to the registered entity. HMRC says each certificate is valid for 12 months from its issue date and a new valid certificate is needed with the next application after expiry.

For each invoice, retain evidence showing the supplier's name, address and VAT number, the claimant's name and address, the goods or services, date of supply, net cost, VAT rate and VAT amount. Import VAT needs the VAT copy of the import entry or other customs document. Keep the originals even where copies are submitted by post or uploaded electronically.

Electronic and postal submission

HMRC allows electronic claims through the Secure Data Exchange Service (SDES). The electronic claim needs the VAT65A, certificate of status, invoices and other supporting information. The business should request access from the Overseas Repayment Unit and keep the dated receipt after submission.

Postal claims remain possible. They require the VAT65A, certificate of status copies, original-invoice copies and supporting documents, sent by the deadline. HMRC says original documents should be retained and may be requested; documents sent by post are not returned.

An agent can prepare or submit the claim, but the claimant must authorise the agent and remain responsible for the accuracy of the application. HMRC notes that an agent may need to register as a tax adviser under the new registration rules. See the UK tax adviser registration guide if an overseas group is appointing a UK-facing agent.

After submission: review, evidence and payment

Keep the submitted schedule and the evidence set together. HMRC may ask for clarification about the claimant's establishment, the relevant VAT group members, business use, import ownership or a restricted expenditure category. A mismatch between the VAT65A legal name, the certificate of status, the invoice entity and the bank details can delay processing even where the underlying UK VAT is genuine. Reconcile the claim to the general ledger and remove duplicate invoices before submission.

If HMRC refuses an amount, separate the rejected line from the accepted claim and record the reason. The notice describes a review route and an appeal route, with the decision letter setting the relevant deadline. Do not resubmit the same unsupported invoice as a new claim. Prepare a short explanation with the invoice, contract, business-use evidence and the precise notice paragraph relied upon. Keep a copy of HMRC correspondence and the date of any review or appeal request.

Currency conversion, repayment instructions and any withholding or bank-charge issue should also be checked against the current notice and the claimant's bank records. The refund process does not turn a non-qualifying cost into a qualifying one, and a refund received should be posted against the same legal entity and period that claimed it. This matters when a VAT group centralises treasury but the group member, rather than the representative member, incurred the UK VAT.

A practical VAT-group checklist

Frequently Asked Questions

Read HMRC VAT Notice 723A before filing. This guide explains the VAT-group and evidence workflow; it is not a decision that a particular cost or claimant qualifies for a refund.

Official sources

• HMRC: Refunds of UK VAT for non-UK businesses — VAT Notice 723A
• HMRC: VAT65A application form
• HMRC: VAT66A certificate of status and refund guidance
• HMRC: Who should register for VAT — VAT Notice 700/1
• HMRC: Partial exemption — VAT Notice 706