Covid-19: delays to overseas VAT claims

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 submitted under the Overseas Refund Scheme

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

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

 HMRC says the move to working from home, in line with government guidance 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.

HMRC now expects to pay valid 2018-2019 claims by 30 September.

The department will write to businesses if their VAT claims will not be paid by 30 September, either because further information is needed or for any other reason.

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, the claim will not be rejected but it will be put on hold until 31 December. This is the deadline for submitting an application for VAT refunds and all the required documents, which include the certificate of status.

If, in these circumstances, a business is not able to obtain the relevant certificate of status by 1 October, it should write to HMRC, who will consider the specifics of that case.

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

Revenue and Customs Brief 9 (2020): delayed VAT repayments to overseas businesses

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