VAT-registered businesses in the EU are allowed to reclaim VAT paid on certain expenses that have been incurred in other EU countries. Local rules apply to what can be recovered, and these may be different to the UK rules. But, typically, a business can reclaim expenses such as exhibition and conference admission fees, local subcontractors, and some countries allow recovery on hotels, car hire and subsistence.
The claim period runs according to the calendar year, with the current one being for expenses incurred between 1 January and 31 December 2014. The deadline to make a claim for this period is Wednesday 30 September 2015, and this deadline is strictly applied.
Businesses are not allowed to reclaim VAT incurred in other EU countries in their UK VAT return. They must make a separate claim – completed online via HMRC’s website.
Many businesses now operate internationally, either buying or selling goods and services overseas, and this will often require European travel expenses. Any business that is incurring VAT in other EU countries, should consider making a claim and to obtain advice as to whether the VAT is recoverable in a particular territory.
Posted in Technical updates