UK VAT Refund 2026: Overseas Businesses Must Claim by 31 December

Overseas businesses have until 31 December 2026 to reclaim eligible UK VAT incurred between 1 July 2025 and 30 June 2026. HMRC has updated VAT Notice 723A, simplifying electronic and postal claim procedures.

UK VAT refund deadline approaching: HMRC updates its guidance for overseas businesses

On 30 October 2026, HM Revenue & Customs (HMRC) updated VAT Notice 723A – Refunds of UK VAT for non-UK businesses, simplifying the instructions for submitting UK VAT refund claims electronically.

This latest update follows several changes introduced in 2025 and 2026, including the acceptance of document copies for postal claims, revised rules for overseas VAT groups and updated electronic submission arrangements.

With the annual deadline approaching, EU and non-EU businesses that are not registered for VAT in the United Kingdom have until 31 December 2026 to reclaim eligible UK VAT incurred between 1 July 2025 and 30 June 2026.

The deadline is strictly applied by HMRC, making November an important time to review outstanding UK VAT recovery opportunities.

Who is eligible for a UK VAT refund in 2026?

The UK overseas VAT refund scheme allows businesses established outside the United Kingdom to recover VAT incurred on eligible business expenditure, provided that they meet the relevant conditions.

To qualify, a business must generally:

• be established and registered for business purposes outside the UK;
• not be registered, liable or eligible to register for UK VAT;
• have no business or fixed establishment in the UK;
• not make supplies in the UK, except for certain permitted transactions, including supplies subject to the reverse charge;
• incur expenses relating to its business activities and satisfy the applicable VAT recovery conditions.

The scheme is available to eligible businesses established both within and outside the European Union.

Special rules apply to certain transactions involving goods in Northern Ireland under the Windsor Framework.

What about overseas VAT groups?

In September 2026, HMRC revised its policy for non-UK businesses belonging to VAT groups.

Under the new rules, each overseas VAT group member must generally submit its own refund claim for the UK VAT it has incurred.

However, for the 2025–2026 refund period only, HMRC will accept claims submitted either by the individual VAT group member that incurred the VAT or by the group’s representative member.

Businesses whose earlier claims were rejected because of the former VAT grouping rules may also qualify for a separate reconsideration procedure. See more detail in our article of Septembre 9: UK VAT Refund Opportunity

Which UK VAT expenses can be reclaimed?

Overseas businesses may be able to reclaim UK VAT, with 20% or 5% rate, incurred on eligible expenditure such as:

• hotel accommodation and qualifying business travel expenses;
• conference, exhibition and trade fair costs;
• business-related services and local purchases;
• equipment and other goods acquired for business purposes;
• import VAT, subject to the relevant ownership, customs and VAT registration conditions.

Not all UK VAT is recoverable. Restrictions apply, particularly to business entertainment, private-use expenditure, and purchases for certain exempt activities.

VAT recovery also depends on the nature of the business’s activities and whether the VAT was correctly charged.

How to submit a UK VAT refund claim in 2026

HMRC currently accepts electronic and postal submissions under the overseas VAT refund scheme.

Electronic submission

Following the update of VAT Notice 723A on 30 October 2026, businesses can submit their claims through HMRC’s “Transfer files securely with HMRC” service, replacing the previous references to the Secure Data Exchange Service (SDES).

The revised guidance simplifies the electronic submission instructions and no longer refers to the former 30 November deadline for requesting SDES access.

Businesses should contact HMRC’s Overseas Repayments Unit for information about using the secure file transfer service.

The electronic claim must include the completed application and the required supporting documents. No separate postal submission of original invoices is required when filing electronically.

Postal submission

Businesses may alternatively submit their UK VAT refund applications by post.

Since the changes introduced in 2025, HMRC accepts copies of invoices and supporting documents, rather than requiring the originals to be sent.

Original documents must nevertheless be retained and made available to HMRC upon request.

For postal claims, businesses should retain evidence of dispatch, as HMRC may request proof that the application was posted by the statutory deadline.

Documents required for UK VAT recovery

Whether submitted electronically or by post, the application should include:

• Form VAT65A, completed with the details of the claimant and the VAT amounts being reclaimed;
• a valid certificate of status, issued by the competent authority in the claimant’s country of establishment;
• compliant UK VAT invoices and, where applicable, import VAT supporting documents;
• any additional information required to substantiate the claim;
• a Power of Attorney or letter of authority where an agent is appointed to act on behalf of the claimant.

The certificate of status is generally valid for 12 months from its date of issue. HMRC may accept electronically issued certificates where the issuing authority provides an accessible online verification system.

Businesses must retain the original supporting documents, even where copies have been submitted, as HMRC may request them when reviewing the claim.

UK VAT refund period and 31 December 2026 deadline

Unlike the calendar-year refund procedures used in many other jurisdictions, the UK overseas VAT refund scheme operates on a prescribed year running from 1 July to 30 June.

For the current deadline of 31 December 2026, the VAT refund period is between 1 July 2025 and 30 June 2026.

Refund applications may cover the full prescribed year or shorter qualifying periods.

The minimum refundable VAT amount is generally £16 for a full-year claim and £130 for a claim covering at least three months but less than the full prescribed year.

HMRC applies the filing deadline strictly. Overseas businesses should therefore ensure that their applications and supporting documentation are ready well before 31 December 2026.

BTOBNICE: Secure your UK VAT recovery before the deadline

BTOBNICE assists EU and non-EU businesses with UK VAT refunds, foreign VAT recovery and the management of refund claims with HMRC.

Our VAT specialists support businesses throughout the recovery process, including:

• reviewing UK business expenses and identifying recoverable VAT;
• checking invoice compliance and obtaining corrections where necessary;
• collecting certificates of status and other supporting documents;
• preparing VAT65A refund applications;
• submitting claims electronically or by post as an authorised agent;
• managing correspondence, additional information requests and follow-up with HMRC;
• monitoring refund decisions and payments.

Has your business incurred UK VAT between 1 July 2025 and 30 June 2026?

Do not miss the opportunity to recover eligible UK VAT before the 31 December 2026 deadline. Contact our VAT experts: contact@btobnice.com

Source: HMRC VAT Notice 723A

FAQ – UK VAT Refund 2026