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HMRC Delays VAT Refunds for Non-EU Companies During Pandemic

Posted on June 23, 2020

HM Revenue & Customs has informed non-EU companies that it is unable to meet the six-month deadline for processing 2018-2019 VAT refund claims under the Overseas Refund Scheme because of the COVID-19 pandemic.

In a June 22 brief, HMRC said it expects to pay valid VAT refund claims for the period from July 1, 2018, to June 30, 2019, by September 30, 2020.

HMRC has put structures in place to allow us to continue to deliver services and process claims as quickly as possible,” the brief states. However, HMRC said it will notify non-EU businesses if it is unable to pay the refund by September 30 because it needs further information or for any other reason.

HMRC explained that its operational processes, including the U.K. VAT Overseas Repayment Unit, were affected by the pandemic and the three-week lockdown announced by Prime Minister Boris Johnson on March 23. Johnson instructed individuals to stay at home unless they were shopping for necessities, exercising, seeking medical care, or traveling to work if they could not work from home.

The U.K. Overseas Refund Scheme allows companies registered in a non-EU country to reclaim VAT paid on goods or services in the United Kingdom. According to VAT Notice 723A, HMRC’s standard deadline for processing and refunding non-EU companies’ 2018-2019 VAT claims is within six months of the December 31, 2019, claim submission deadline.

Acknowledging that foreign companies may not be able to comply with their certificate of status document requirement because of the government's COVID-19 measures, HMRC said that for VAT refund claims for July 1, 2019, to June 30, 2020, it will accept applications without a certificate of status. However, HMRC will put the applications on hold until the December 31, 2020, deadline.

According to the brief, companies that cannot receive a certificate of status by October 1 should contact HMRC, and it will “consider the specifics of [the] case.” Companies should also contact HMRC if they will be unable to obtain a certificate of status before the December 31, 2020, deadline.

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