Businesses established outside the UK can reclaim VAT incurred in the UK where certain conditions are met.

On 8 September 2026, HMRC updated its guidance for businesses that are members of VAT groups, changing how claims must be made. Businesses that had claims rejected under the previous guidance can ask HMRC to review their claim.

Change in policy

Prior to the amendment, the guidance stated that the representative member of the VAT group – not necessarily the business incurring the VAT – must apply for the refund of VAT. The updated guidance states that the business that incurred the VAT must submit the claim.

As a transitional measure, HMRC will accept claims for VAT incurred in the 2025-2026 prescribed year (1 July 2025 to 30 June 2026) from either:

• the business that incurred the VAT; or
• the representative member of the VAT group.

Background

Revenue & Customs Brief 8 (2026) explains that HMRC has updated its guidance to address “an unintended consequence of the UK’s exit from the EU”.

Before 1 January 2021, businesses established in the EU that were part of a VAT group could submit claims in their own name in some circumstances. From 1 January 2021, all non-UK businesses that were members of a VAT group had to submit claims through the representative member. As a result of this, some businesses that could have claimed a refund for VAT incurred before 1 January 2021 were unable to do so for VAT incurred from that date.

Rejected claims

HMRC says that it will review claims for VAT incurred from 1 January 2021 that it rejected because the representative member did not submit the claim. This only applies where the VAT was not included in a later claim submitted by the representative member.

The business must contact HMRC and ask it to review a rejected claim. The Brief explains how to do this. The deadline for asking HMRC to review a claim is 31 August 2027.