Don’t miss out on reclaiming VAT paid abroad

Businesses that pay VAT on goods and services purchased abroad whilst on business there, are reminded that the deadline for submission of claims relating to the year ended 31 December 2011 expires at the end of September 2012. 

The claims – previously known as “Eight Directive” claims – enable businesses to reclaim the vat paid on purchases within the EU with a business purpose.  Claims are submitted to HM Revenue & Customs in the UK for initial vetting then referred onto the tax authorities of the countries concerned. If claims haven’t been received by the deadline then they won’t be counted.

The primary rules governing what VAT can be recovered are: –

  • Claims are permitted for repayment of € 50 and upwards,
  • All claims must be submitted by 30 September
  • The claimant must not be registered for VAT, or have a place of business, in the member state to which the claim is addressed.

The exact rules do vary from EU state to EU state but broadly speaking VAT can be claimed on expenditure on fuel, the hire of and expenditure relating to means of transport, road tolls and road user charges, travel expenses – such as taxi fares, public transport fares – accommodation, food and drink and admissions to fairs and exhibitions.

Andrew Stephenson, Senior VAT specialist at Pierce chartered accountants, “We have seen an increase in the last 12 months of businesses making sure they are on top of their VAT claims. In times of economic uncertainty, we are seeing more business applying for the rebates they are entitled to and reinvesting the cash back into the business to assist cash flow”.

If you wish to know more about how to claim ring Andrew Stephenson.