VAT Refunds for UK-Based VAT-Registered Businesses
UK businesses that are registered for VAT can reclaim VAT on goods and services purchased solely for business use. This allows companies to recover costs on operational expenses such as:
- Office equipment and supplies
- Computer hardware and software
- Business-related travel and accommodation
- Professional fees (legal, accounting, etc.)
However, VAT cannot be reclaimed on:
- Goods and services used for personal or non-business purposes
- Business entertainment of clients or suppliers
- Expenses relating to exempt supplies (for example, financial services)
To successfully reclaim VAT, businesses must maintain proper documentation, including valid VAT invoices showing the supplier’s VAT number, the amount charged, and the date of supply.
Claims are generally made through the VAT Return, submitted quarterly or annually depending on the business’s accounting period.
VAT Refunds for Non-UK Businesses
Overseas businesses without a UK establishment may still be eligible for a UK VAT refund if they meet specific conditions. To qualify, the business must:
- Not be registered or required to register for VAT in the UK.
- Have no place of business or fixed establishment in the UK.
- Not make taxable supplies in the UK (with limited exceptions for transport or certain digital services).
Eligible non-UK businesses can claim VAT on:
- Goods and services purchased during visits to the UK.
- Goods imported into the UK for business use.
Claim Process for Non-UK Businesses
Refund claims are made using the VAT65A form, which can be downloaded from the HMRC website. The claim must be accompanied by:
- Original VAT invoices or import documentation.
- A certificate of status from the applicant’s home country tax authority confirming business activity.
- Any additional supporting records relevant to the claim.
The claim must be submitted by 31 December following the end of the refund period (usually the calendar year).
Refunds are paid directly to the business’s bank account, typically within four to six months after submission, provided all documentation is correct.
VAT Refunds for International Visitors
As of 2025, the VAT Retail Export Scheme (tax-free shopping) has been discontinued in Great Britain. This means that non-UK and non-EU visitors cannot claim VAT refunds on goods purchased and taken home from stores in England, Scotland, or Wales.
However, visitors can still enjoy VAT-free shopping under limited circumstances if:
- The goods are purchased in-store and
- Shipped directly by the retailer to an address outside the UK.
This arrangement depends entirely on the retailer, so it’s important to confirm whether this service is available before making a purchase.
Northern Ireland VAT Refund Rules
In contrast to Great Britain, Northern Ireland continues to operate a version of the VAT Retail Export Scheme. This allows non-EU visitors to claim VAT refunds on eligible goods purchased in Northern Ireland if they:
- Take the goods out of the EU within three months of purchase.
- Present the required documentation and receipts to customs upon departure.
This refund scheme is limited to Northern Ireland and does not apply to goods purchased elsewhere in the UK.
Minimum Claim Amounts for VAT Refunds
For non-UK businesses, HMRC has set minimum claim thresholds:
- £130 for refund periods between three months and one year.
- £16 for a full-year claim.
Claims below these amounts will not be processed. Businesses should therefore ensure that all eligible VAT expenses are properly recorded and submitted together.
Common Exclusions from VAT Reclaims
Even for eligible claimants, some expenses remain non-reclaimable under UK VAT law. These include:
- Business entertainment of UK or overseas clients.
- Goods purchased for resale outside business operations.
- Private or personal use items.
- Expenses related to exempt or non-business activities.
Before filing, it’s essential to verify that each expense qualifies for VAT recovery under HMRC’s guidance.
How Long Does It Take to Receive a VAT Refund?
Processing times can vary based on claim complexity and documentation accuracy. Typically, businesses receive VAT refunds within four to six months of submitting a complete claim.
Delays may occur if:
- Supporting documents are missing or unclear.
- The claim is incomplete or contains calculation errors.
- HMRC requires further verification of eligibility.
To avoid delays, businesses should ensure all invoices and forms are clear, consistent, and legible before submission.
Frequently Asked Questions
Q: Can UK residents claim VAT refunds on personal purchases?
No. VAT refunds are not available to UK residents for personal shopping or consumer goods.
Q: Are there minimum amounts for VAT refund claims?
Yes. Non-UK businesses must meet the £130 (quarterly) or £16 (annual) minimum thresholds.
Q: How long does it take to receive a VAT refund?
Most claims are processed within four to six months, depending on HMRC’s workload and claim completeness.
Q: Can I claim VAT on mixed business and personal expenses?
Only the business-use portion of the expense can be reclaimed. Personal use elements must be excluded.
Q: Is VAT reclaimable on all business expenses?
No. Certain costs, such as business entertainment, private purchases, or non-business goods, are not eligible.
Q: Do EU and non-EU businesses follow the same refund process?
Since Brexit, non-UK businesses (including EU companies) must use the VAT65A form process rather than the EU VAT refund system.
Conclusion
Understanding VAT refund eligibility in the UK for 2025 helps businesses and visitors maximise potential refunds while ensuring compliance with HMRC rules. UK-registered businesses can reclaim VAT on legitimate business expenses, while overseas companies must follow the VAT65A claim process.
International visitors can still access VAT-free shopping through direct shipping options, and Northern Ireland maintains a separate refund scheme for non-EU travellers.
Staying up to date with the latest HMRC regulations and deadlines is key to avoiding errors and securing your rightful refunds efficiently.
For fixed-fee legal help with your case,
contact Martin Taggart — your trusted UK legal partner.