When you incur VAT on European business expenses you cannot reclaim the VAT through your UK VAT return.
So what can you do?
If you meet the requirements you may be to reclaim the EU VAT through the UK VAT portal.
Those conditions are:
- You must be VAT registered in the UK; and
- You must not be registered for VAT (nor liable to be registered) for VAT in the EU country; and
- You must not have an office or other place of business in the EU country; and
- You do not make supplies of goods or services in the EU country unless the customer pays the VAT (the reverse charge).
When can you claim?
The claim must cover a complete quarter or for the whole year. The general thresholds for a VAT reclaim application are:
- EUR 50 for a full year; or
- EUR 400 for a quarter.
The thresholds can vary from country to country.
Is there a deadline?
The deadline for submitting a claim is the 30 September after the calendar year, so a claim for EU VAT incurred in 2017 must be made by 30 September 2018. Late claims are not accepted.
You must retain the supporting invoices as you may need to produce then to support the claim.
Different countries, different rules!
Different countries use slightly different VAT rules so VAT may not be recoverable on all business expenses, for example, many countries block VAT recovery on road tax or accommodation expenses.