brexit: no eu refund for british vat from 1 january 2021

Tax & Legal
12 November 2020

by Dries Torreele and Bert Vandorpe

Brexit: no EU refund for British VAT from 1 January 2021

In recent years, people who conducted business with the United Kingdom could use the European VAT-Refund application to claim back any VAT paid in the UK. This is yet another arrangement that will be impacted by Brexit. What does this mean in practice for enterprises wishing to claim a VAT refund from the UK?

Brexit: no EU refund for British VAT from 1 January 2021

EU VAT refund

Before, Belgian enterprises that paid VAT in the United Kingdom could apply for a refund to claim back that VAT. They submitted such claims, known as EU VAT refunds, to the Belgian tax authorities through Intervat. This method will remain applicable for any VAT paid up to 31 December 2020 and can still be applied through 31 March 2021.

What about UK VAT after 1 January 2021?

From 1 January 2021, VAT paid in the UK can no longer be reclaimed by this method. Taxpayers must resort to the UK’s internal VAT refund procedure. This British procedure differs from the European one in several aspects:

  •  Refunds must be requested directly from the British tax authorities (HMRC). 
  • The refund period is not based on the calendar year, but on the period between 1 July and 30 June. 
  • The final deadline is set at 6 months after the refund period (31 December in this case).
  • Refunds may take place every quarter (£130 minimum) or annually (£16 minimum).

From now on, Belgian entrepreneurs doing business in the UK will need to take British regulations into account. Our specialists are happy to be of assistance.