Overseas VAT claims delayed: Covid-19

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The tax authority has stated that VAT claims submitted under the Overseas Refund Scheme will be subject to delays. HMRC has admitted that changes to its working practices, as a result of the pandemic, have resulted in delays in processing and refunding VAT claims.

The delays relate to payments due to overseas businesses that are not established in the EU.

The affected claims are those submitted on or before 31 December 2019 (within the prescribed year 1 July 2018 to 30 June 2019).

HMRC says that working from home move ( guidance issued on 23 March) has affected some of its operational processes.

As a result, while its objective is to process and refund overseas VAT claims within six months of the submission deadline of 31 December the changes mean the department is unable to meet this deadline for some of the 2018/19 claims.

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HMRC now expects to pay valid 2018/19 overseas VAT claims by 30 September.

The department will write to businesses if they don’t receive VAT claims by 30 September.

HMRC says it is also aware that some overseas businesses or their agents and advisers may not be able to obtain the required certificate of status from their official issuing authorities due to measures taken by jurisdictions in response to coronavirus.

If a business has submitted a VAT refund claim without a certificate of status, HMRC will not reject the claim. They will put it on hold until 31 December. This is the deadline for submitting an application for VAT refunds and all the required documents. It includes the certificate of status.

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Businesses unable to obtain the relevant certificate of status by 1 October should write to HMRC.

Businesses likely to make a claim should request a certificate of status as early as possible before 31 December. They should also let HMRC know if they are unlikely to be able to obtain a certificate of status before 31 December.

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