VAT Recovery on Business Travel to the United Kingdom

If your company does business in the UK, you’ve paid 20% VAT on almost everything. Most of it, related to Business travel, is recoverable, and most companies never claim it.

The United Kingdom charges one of the highest standard VAT rates among major economies. At 20%, the tax applies to hotels, conference fees, trade fair costs, transport, and nearly every other business expense your employees incur during a UK trip. Unlike many countries where VAT recovery for foreign businesses is riddled with restrictions, the UK’s refund scheme is relatively favourable. His Majesty’s Revenue and Customs (HMRC) allows overseas businesses to recover VAT on a broad range of expenses, provided the claim is properly documented and filed on time.

Since Brexit, the UK operates entirely outside the EU VAT framework. This means the process for recovering UK VAT is now the same for all non-UK businesses, whether you’re based in France, Colombia, or the United States. The upside: one consistent process. The downside: it’s no longer as simple as filing through your home country’s EU portal.

This page explains who qualifies, what you can claim, what’s blocked, and exactly how the process works, or visit our VAT Recovery Services page for more information.

A Critical Distinction: Not All UK Charges Include VAT

The UK charges Value Added Tax under the Value Added Tax Act 1994, administered by HM Revenue & Customs (HMRC). VAT is applied at various rates for different products and services: Standard rate at 20%, Reduced rate at 5%, and Zero Rate at 0%. It is worth noting that certain services are exempt from VAT.

Before assembling a claim, it’s worth understanding that many services purchased from UK suppliers may not carry UK VAT at all. This is actually to your advantage.

Under UK place-of-supply rules, most B2B services supplied to a business customer established outside the UK are treated as supplied where the customer belongs, not where the supplier is. This means the service falls outside the scope of UK VAT entirely. Common examples include:

• Consultancy and advisory services
• Legal and accounting services
• IT services and software development
• Management and training services
• Advertising and marketing services
• Subscriptions and memberships (though the VAT treatment varies significantly depending on what the subscription provides; some are outside the scope, some carry UK VAT, and some are exempt. Check each invoice individually)

If a UK supplier is correctly applying the rules, these services should appear on your invoice with no VAT charged (or at 0%). If you’ve been charged UK VAT on services that should have been outside the scope, the first step is to ask the supplier to issue a corrected invoice, not to claim a refund from HMRC. The supplier can also be requested to refund the VAT erroneously charged.

Where UK VAT does apply, and where the recovery opportunity lies, is on goods and services consumed in the UK: hotels, restaurants, venue hire, exhibition space, local transport, fuel, equipment hire, and similar on-the-ground expenses.

Who Can Claim a UK VAT Refund?

Your business is eligible to use the UK’s overseas VAT refund scheme if it meets all of the following conditions:

• Established outside the UK: Your company has no office, branch, warehouse, or other fixed place of business in the UK.
• Not VAT-registered in the UK: You don’t file UK VAT returns and aren’t required to register for UK VAT.
• Not making taxable supplies in the UK: You aren’t selling goods or services that would trigger a UK VAT registration obligation. (There are narrow exceptions for certain supplies, such as goods purchased for resale and subsequently exported.)
• Incurred UK VAT on qualifying business expenses: You paid VAT on goods or services purchased in the UK or imported into the UK for genuine business purposes.

The Reciprocity Requirement

HMRC applies a reciprocity condition, but it works more permissively than most people expect. HMRC’s published position is that a claim will only be refused on reciprocity grounds if the claimant’s home country has a VAT/GST refund scheme but actively refuses to let UK businesses use it. If your country doesn’t have a VAT system at all, or doesn’t have a refund scheme that excludes UK businesses, that’s not grounds for refusal.

This is one of the more favourable reciprocity frameworks among major economies. Most businesses from EU countries, the US, Canada, Australia, Japan, Switzerland, Norway, Colombia, and many other jurisdictions can claim UK VAT refunds without issue.

For companies registered in Colombia: Colombia does not operate a VAT refund scheme that blocks UK businesses, so reciprocity is not an issue. Colombian-registered entities routinely recover UK VAT. This is particularly relevant for Colombian subsidiaries of British and European multinationals, whose employees regularly travel to the UK for headquarters visits, regional conferences, and training programmes.

If you’re unsure whether your country qualifies, a VAT recovery specialist can confirm this quickly.

What Expenses Qualify for Recovery?

The UK is relatively generous in what it allows overseas businesses to reclaim. The general principle: if a UK-registered business could deduct the VAT as input tax on a normal VAT return, an overseas business can recover the same VAT through the refund scheme.

Fully Recoverable (100%)

• Hotel accommodation: The full 20% VAT on room charges. This is typically the single largest recoverable item for business travellers. Ancillary charges (parking, room service, laundry, minibar) are also standard-rated at 20% and separately recoverable.
• Conference and seminar fees: Registration, venue hire, equipment rental, AV hire.
• Trade fair and exhibition costs: Stand rental, build-out costs, registration fees, display materials.
• Restaurant meals (employee subsistence): Meals taken by employees while travelling for business. The full 20% VAT is recoverable when the meal is employee subsistence, meaning the employee is working away from their normal place of business. This is distinct from client entertainment (see blocked items below).
• Taxis, rail travel, and coach hire: Where VAT is charged. Note that many rail tickets are zero-rated, so check whether VAT actually appeared on the receipt.
• Car hire: Fully recoverable if the vehicle is used exclusively for business. Where there’s mixed business and personal use, 50% of the VAT is recoverable.
• Fuel (with conditions): VAT on fuel is not automatically recoverable. HMRC requires one of three approaches: claim all fuel VAT and pay a Road Fuel Scale Charge to account for any private use; maintain detailed mileage logs separating business and personal miles, claiming only the business portion using HMRC’s Advisory Fuel Rates; or don’t claim at all. For overseas businesses hiring a car for a short UK trip, the simplest compliant approach is to keep a mileage log for the trip and claim only the business-use portion. Without proper records, fuel claims are likely to be rejected or trigger an audit.
• Telecommunications: UK mobile charges, internet access, data roaming billed by UK networks.
• Printing, copying, and office supplies: Purchased in the UK for business use.
• Goods purchased for export: Raw materials, samples, or products bought in the UK and exported for business use.
• Advertising and marketing materials: Printed brochures, signage, and promotional items produced in the UK.

Partially Recoverable

• Leased or hired vehicles with mixed use: 50% of the VAT on the lease or hire charge is recoverable. Running costs (repairs, parking) remain fully recoverable to the extent of business use. Fuel follows separate rules (see above).
• Mixed business/personal expenses: Only the business portion is recoverable. You must be able to justify the split.

What’s Blocked? The UK’s Non-Recoverable Items

The UK has a short but important list of expenses where VAT recovery is specifically blocked by law, regardless of business purpose. Getting this wrong is a common reason for claim rejection.

Business Entertainment (the Big One)

VAT on hospitality provided to anyone who is not an employee of your company is blocked. This includes:

• Client dinners, lunches, and drinks
• Event tickets, sporting hospitality, and corporate box hire
• Hotel stays provided for clients or suppliers
• Gifts to business contacts (over a nominal value)

HMRC defines “business entertainment” broadly: any hospitality or entertainment provided free of charge to non-employees for the purpose of building or maintaining business relationships.

The overseas customer exception. There is a narrow exception for hospitality provided to overseas customers (not UK-based customers). However, this exception is far more limited in practice than it appears on paper, because of the “private benefit” rule.

HMRC applies two tests from European case law: the “necessity test” (was it necessary for the business to provide this hospitality to make its taxable supplies?) and the “strict business purpose test” (was there a strict business purpose, such as facilitating a meeting?). If the entertainment fails either test, HMRC requires an output tax charge equal to the input tax claimed, which cancels out the recovery entirely.

In practical terms, this means:

• Recoverable (no output tax charge): Basic refreshments provided during a business meeting at your office, staff canteen, or similar working environment. Think sandwiches, coffee, and soft drinks served while discussing business. HMRC accepts that the basic, non-optional nature of this fare means no private benefit arises.
• Not worth claiming: Restaurant meals with overseas customers. Even if the customer is overseas and the meeting has a genuine business purpose, HMRC takes the view that a restaurant meal confers a private benefit on the attendees. The output tax charge will cancel out the input tax recovery, leaving no net benefit and adding administrative complexity.
• Blocked entirely: Lavish entertainment, sporting events, evening outings, theatre tickets, and similar hospitality. These fail both the necessity and strict business purpose tests regardless of who attends.

The safest approach for finance teams: do not include restaurant bills involving clients (even overseas ones) in your VAT refund claim. If you need to provide hospitality to overseas customers during a UK visit, keep it to basic working refreshments in a business setting.

Motor Vehicles

VAT on the purchase of most standard business cars is blocked outright. This rarely affects overseas businesses using the refund scheme, but it’s worth noting if you’re considering purchasing a vehicle in the UK.

For leased or hired cars with mixed use, 50% of the VAT is recoverable (as noted above). This is a statutory restriction; you cannot argue for a higher business-use percentage.

Second-Hand Goods on Margin Schemes

Certain second-hand goods (cars, antiques, works of art) sold under the VAT margin scheme do not carry a separate VAT charge on the invoice. Since no VAT is shown, there’s nothing to claim.

Supplies Used for Exempt Activities

If your business makes predominantly VAT-exempt supplies (financial services, insurance, certain property transactions), the recoverable amount may be restricted or nil, even through the refund scheme.

How Much Can You Recover? A Worked Example

Consider a Colombian subsidiary of a British multinational sending a team of four to London for a week of headquarters meetings, a strategy review, and an industry conference:

Nearly £2,000 from a single trip. A company sending teams to the UK two or three times a year, or maintaining ongoing client relationships that require regular travel, can easily accumulate £5,000 to £10,000 or more in annual recoverable VAT.

Note: this example excludes client entertainment (blocked) and rail travel (often zero-rated). The recoverable amount is conservative.

The UK Claim Year and Deadlines

The UK uses a non-standard claim year that differs from most countries. This catches many businesses off guard.

The prescribed year runs from 1 July to 30 June of the following calendar year.

The filing deadline is 31 December following the end of the prescribed year.

In practical terms: for expenses incurred between 1 July 2025 and 30 June 2026, you must file your claim by 31 December 2026.

This deadline is strictly enforced. HMRC does not grant extensions, and late applications are rejected without exception. Claims cannot be carried forward to a subsequent year.

Claim Frequency and Minimum Amounts

You can submit up to 4 claims per prescribed year, with at least 3 months between each claim. The structure is flexible; you could claim quarterly, every six months, or once annually.

Minimum claim thresholds:

• £130: For claims covering any period of less than the full prescribed year (minimum 3 months).
• £16: For claims covering the full 12-month prescribed year, or for the remainder of a year if less than 3 months remain.

In practice, the administrative effort means claims under approximately £2,000 may not justify the time investment if handled internally. This is precisely where a recovery specialist adds value, as they batch and process claims efficiently across multiple clients.

While the above are the minimum thresholds specified for HMRC. We have our own minimum thresholds below which it does not become worth the time we have to spend on the project. Our level is UKL 300 per claim.

Required Documentation

HMRC is thorough in its documentary requirements. Incomplete or non-compliant submissions are the leading cause of rejected claims.

Form VAT65A

This is the application form for the refund scheme. It must be completed electronically; HMRC will not accept handwritten schedule entries (question 9, the invoice schedule, must be typed). The form captures the following:

• Your company details (name, address, nature of business)
• The prescribed year and claim period
• A schedule of every invoice being claimed, including supplier details, invoice date, description of goods/services, and the VAT amount

Certificate of Status

You must provide a Certificate of Status (equivalent to a VAT66A) issued by the tax authority or official government body in your home country. This confirms that your business is established and registered for tax purposes in that jurisdiction.

Critical details:

• The certificate must be an original. HMRC does not accept copies.
• It is valid for 12 months from the date of issue. You must renew it annually if you make recurring claims.
• It must be issued by an official authority; a letter from your accountant or solicitor is not acceptable.
• HMRC now accepts electronic certificates of status, provided the issuing authority has an online validation system that HMRC can verify.

For Colombian companies: DIAN can issue a certificate of tax status (Certificado de Existencia y Representación Legal, or a
Registro Único Tributario (RUT-based) certification) that satisfies this requirement. Your accountant or the DIAN office can prepare this.

Failure to include a valid Certificate of Status is one of the most common grounds for claim rejection, particularly for first-time claimants.

Supporting Invoices

You must submit copies of all VAT invoices supporting the claim. Each invoice must show:

• The supplier’s name, address, and UK VAT registration number
• Date of supply and invoice number
• A clear description of the goods or services
• The net amount, VAT rate, and VAT amount must be separately stated
• Employee’s name and the company address where the employee is employed

Important: HMRC now accepts copies of invoices submitted electronically. You no longer need to courier original paper invoices. However, you must retain all original hard copies until HMRC has processed your claim. HMRC reserves the right to request originals at any point during the review process.

Additional Evidence

Depending on the nature of the expense, HMRC may request:

• Contracts or booking confirmations
• Event participation records (conference badges, exhibitor confirmations)
• Proof that goods were exported from the UK
• Evidence supporting the business purpose of claimed expenses

How to Submit a Claim

Electronic Submission (Recommended)

HMRC now supports electronic claims via its Secure Data Exchange Service (SDES). This is the preferred method and significantly speeds up processing.

To use SDES:

1. Request access: Email HMRC’s Overseas Repayment Unit (ORU) to register for SDES. This isn’t instant; allow time for HMRC to set up your access.
2. Complete form VAT65A electronically.
3. Scan and upload all supporting invoices and the Certificate of Status through SDES.
4. Receive a date-stamped receipt confirming submission. Keep this; it’s your proof of timely filing.

Postal Submission

If you can’t use SDES, you may post your claim to:

HM Revenue and Customs
Compliance Centres
VAT Overseas Repayment Unit
S1250 Benton Park View
Newcastle upon Tyne
NE98 1YX
United Kingdom

The original Certificate of Status must be sent by post, even if the rest of the claim is submitted electronically. HMRC may request proof of postage to confirm the claim was submitted by the 31 December deadline.

Using an Agent

You may appoint a UK-based agent or VAT recovery specialist to submit claims on your behalf. The agent registers with HMRC to make submissions for your business, handles the documentation assembly, and corresponds with HMRC throughout the process. This is the most common approach for businesses that lack in-house UK VAT expertise.

A Power of Attorney or Letter of Authorisation is needed to authorise the agent.

Processing Times and Payment

HMRC aims to process overseas refund claims within 6 months of receipt, though processing times vary depending on claim complexity, volume, and the quality of documentation.

Refunds are paid by international bank transfer (SWIFT) directly to the bank account specified in your application. Ensure your banking details, including SWIFT/BIC code and IBAN (or account and routing numbers for US banks), are correct on the form. Errors cause significant delays.

If you haven’t received any communication from HMRC within 6 months of submitting your claim, you can email the Overseas Repayment Unit, attaching the date-stamped SDES receipt as proof of submission.

If Your Claim Is Rejected

HMRC will provide written reasons for any full or partial rejection. You have two options:

1. Request an internal review: Ask for the decision to be reviewed by an HMRC officer who was not involved in the original decision. This is free and often resolves issues caused by missing documentation or misclassification.
2. Appeal to the First-tier Tribunal: An independent tribunal that hears tax disputes. This is a formal process and typically only justified for significant amounts.

In practice, most rejections relate to documentation deficiencies (missing invoices, expired Certificate of Status, invoices not addressed to the claiming entity) rather than substantive eligibility issues. A specialist can often prevent these problems before submission.

The Brexit Factor: What Changed

Before 1 January 2021, EU-based businesses could reclaim UK VAT through the EU’s electronic cross-border refund system (the 8th Directive mechanism). This was a relatively streamlined process handled through the claimant’s home country tax portal.

Post-Brexit, this mechanism no longer applies. All non-UK businesses, including those in the EU, must now use the same process: form VAT65A, Certificate of Status, and direct submission to HMRC.

What This Means in Practice

For EU businesses: The process is more administrative than before. You can no longer file through your home country’s portal. You must obtain a Certificate of Status, submit directly to HMRC (via SDES or post), and manage the correspondence yourself or through an agent. The claim year (July to June) and deadline (31 December) are different from the EU’s calendar-year cycle with a 30 September deadline. Adjusting to this calendar is essential.

For non-EU businesses: Nothing has changed. The UK process has always used the VAT65A route for non-EU claimants. If anything, Brexit has levelled the playing field.

Northern Ireland exception: Businesses established in Northern Ireland can still use the EU’s 8th Directive electronic system for VAT incurred in EU member states, due to the Northern Ireland Protocol. This does not affect claims for VAT incurred in Great Britain (England, Scotland, and Wales).

Common Mistakes That Cost Businesses Money

1. Missing the deadline. The 31 December cutoff for the July-to-June claim year is unlike any other major VAT jurisdiction. Businesses accustomed to EU deadlines (30 September of the following calendar year) or US tax extension culture are particularly vulnerable.
2. Confusing subsistence with entertainment. Employee meals during business travel are subsistence, and they’re recoverable. The same meal with a client present becomes entertainment, which is blocked. This distinction hinges on who sits at the table, and HMRC takes it seriously. Even if the client is an overseas customer, restaurant meals will typically trigger a “private benefit” output tax charge that cancels out the recovery. Strip all client-present restaurant bills from the claim.
3. Claiming fuel without proper records. Simply including fuel receipts in a claim without mileage logs will raise flags. HMRC expects you to demonstrate the business-use portion using one of their approved methods (Advisory Fuel Rates with mileage records, or fuel scale charges). Fuel claims without supporting records are a common audit trigger.
4. Accepting VAT charges that shouldn’t exist. UK suppliers sometimes incorrectly charge VAT on services that should be outside the scope under the place-of-supply rules. Claiming a refund for incorrectly charged VAT is more complex than simply asking the supplier to correct the invoice. Check before you pay. HMRC usually informs the applicant to liaise with the supplier and obtain the refund of VAT, which should not have been charged in the first place.
5. Submitting credit card receipts instead of VAT invoices. A credit card slip showing a total is not a VAT invoice. You need the supplier’s full invoice showing their VAT number, the net amount, and the VAT separately. Hotels and conference providers will issue these on request, but you must ask.
6. Expired Certificate of Status. The 12-month validity window means businesses making annual claims need to request a fresh certificate every year. If it expires before submission, the claim is rejected.
7. Claiming VAT on zero-rated items. Rail tickets, for example, are frequently zero-rated in the UK. If no VAT was charged, there’s nothing to recover. Including zero-rated items in a claim suggests carelessness and can trigger a more detailed review of the entire application.
8. Not claiming at all. This is the biggest mistake. Many businesses assume that recovering foreign VAT is too complicated or that the amounts aren’t worth pursuing. For any company spending more than a few thousand pounds per year on UK business travel, the recoverable VAT is real money, often 15 to 17% of total eligible spend (after accounting for items where VAT wasn’t charged).

Why Colombian Subsidiaries Often Miss This Opportunity

Many Colombian subsidiaries of British and European multinationals send employees to the UK regularly for headquarters meetings, annual reviews, regional strategy sessions, and industry conferences. These trips generate significant recoverable VAT, particularly on hotel stays and event fees.

Yet the refund often goes unclaimed. A few reasons this happens:

The finance team focuses on Colombian tax obligations. IVA, retención en la fuente, and DIAN reporting consume the attention of local finance staff. UK VAT recovery isn’t on their radar because it falls outside the Colombian tax framework entirely.

The parent company assumes the subsidiary handles it (and vice versa). Because the expenses are incurred by the Colombian entity’s employees, the UK head office may not realise there’s a refund to claim. Meanwhile, the Colombian team may assume the head office handles UK tax matters. The result: nobody claims.

Expense management systems don’t flag the opportunity. Platforms like SAP Concur, Oracle, and others are excellent at categorising and approving expenses, but they don’t automatically identify foreign VAT recovery opportunities. The data is there; it just needs to be extracted and submitted through the correct channel.

A VAT recovery specialist can work directly with your expense data, regardless of which system you use, to identify eligible invoices, prepare compliant claims, and file with HMRC on your behalf.

How Coromandel Can Help

Coromandel recovers VAT on behalf of businesses operating in Colombia. We handle the entire UK refund process end to end: reviewing your invoices and expense records, identifying what’s recoverable (and flagging what isn’t), preparing compliant VAT65A submissions, managing the Certificate of Status requirement, submitting through HMRC’s electronic portal, and following up until your refund is paid.

We work directly with your finance team in Bogota. You don’t need to learn the UK’s VAT refund scheme, register for SDES, or track the July-to-June claim year. We handle the UK side; you keep your focus on running the business.

Get in touch →
Send us your UK business travel invoices from the current or previous claim year. We’ll tell you exactly what’s recoverable, at no cost and with no obligation.

Frequently Asked Questions