Update on UK VAT refunds for non-UK businesses

HMRC have updated guidance on UK VAT refunds for non-UK businesses in a VAT group.

Revenue & Customs Brief 10 (2026) explains changes to how non-UK businesses in a VAT group should make future UK VAT refund claims and the transitional arrangements. It also explains how to ask HMRC to reconsider claims made since 1 January 2021 that have been refused.

The issue

Non-UK businesses can use the overseas VAT refund scheme to claim back UK VAT if they meet the scheme conditions. Before Brexit, businesses established outside the EU had to submit claims through the VAT group’s representative member, even if that representative member had not incurred the UK VAT.

In some circumstances, businesses established in the EU could submit claims in their own name.

Since 1 January 2021, all non-UK businesses that were members of a VAT group have had to submit claims through the group representative member.

As a result, some EU VAT group members were no longer able to submit claims in their own name. This meant that in some cases, such as where the representative member was registered for VAT in the UK, the business that incurred the UK VAT was unable to claim a refund.

This was an unintended consequence of the UK’s exit from the EU.

The solution

The current changes will allow all eligible non-UK businesses to claim refunds of UK VAT in the same way, whether they are in the EU or elsewhere.

All non-UK businesses that are members of a VAT group can and must submit their own claim for any UK VAT they incur. HMRC will not accept claims from a representative member unless that representative member incurred the VAT.

As a transitional measure, HMRC will accept claims for VAT incurred between 1 July 2025 and 30 June 2026 (the 2025-26 prescribed year) from either:

• The individual VAT group member that incurred the VAT.
• Or the representative member of the VAT group.

The deadline for submitting claims for the 2025-26 prescribed year is 31 December 2026.

Reviewing rejected claims by HMRC

HMRC have said they will review claims for VAT incurred from 1 January 2021 that have previously been rejected because the representative member did not submit the claim, provided that the VAT was not included in a later claim.

If you have concerns over your VAT position or your tax position within a group, please get in contact. We are here to help you.

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