HMRC has changed how non-UK businesses in VAT groups can reclaim UK VAT, creating new filing responsibilities and an important chance to revisit some previously rejected claims.
Revenue & Customs Brief 8 (2026), published on September 8, confirms that eligible overseas businesses must now submit their own claims for UK VAT they incur. They can no longer rely on the VAT group’s representative member to claim that VAT on their behalf.
The update also gives businesses clear deadlines for transitional claims and certain VAT refunds refused after Brexit.
What Has HMRC Changed?
Under HMRC’s revised approach, each non-UK business that belongs to a VAT group must make a separate claim for the UK VAT it has incurred.
The representative member can still make a refund claim for VAT it incurred itself. However, HMRC will no longer accept a claim from that representative member for VAT incurred by another overseas member of the group.
The change addresses a problem that arose after the UK left the EU. From January 1, 2021, non-UK VAT group members had to claim through their representative member. In some cases, this meant the overseas business that actually paid the VAT could not recover it.
HMRC has now changed that position so eligible non-UK businesses can claim in their own name, which is one reason UK VAT registration for non-resident businesses needs careful review within a group structure.
Transitional VAT Claims Face a 31 December Deadline
HMRC has introduced a transitional arrangement for VAT incurred between July 1, 2025, and June 30, 2026.
For this period, a claim can be submitted either by the overseas VAT group member that incurred the VAT or by the group’s representative member.
However, there is limited time left to act.
Claims for the 2025–26 prescribed year must reach HMRC by December 31, 2026.
Businesses with outstanding claims should check which group member incurred the VAT and confirm that the correct claim is being prepared before the deadline passes, using the standard VAT return process where relevant.
Previously Rejected Claims Could Be Reviewed
The announcement is also important for businesses that had VAT refund claims rejected after Brexit.
HMRC says it will reconsider certain claims for VAT incurred from January 1, 2021, where the claim was refused because the representative member had not submitted it.
There is one key condition. The VAT must not have been included in a later claim made by the representative member.
Businesses asking HMRC to reconsider a claim must provide details of the original claim and confirm that the VAT was not recovered later.
The deadline for requesting reconsideration is August 31, 2027. HMRC says it won’t consider requests received after this date.
Who Needs to Take Action Now?
The update matters to eligible non-UK businesses that belong to VAT groups, as well as finance teams and advisers managing UK VAT refund claims for international groups, including those already navigating cross-border VAT compliance in France or other EU jurisdictions.
Ignoring the change could mean submitting a claim through the wrong group member, delaying a refund, or missing a deadline for an older claim.
Businesses should now:
- Review current VAT refund procedures
- Identify any outstanding 2025–26 claims
- Check whether HMRC rejected eligible claims after January 1, 2021
They should also confirm that any VAT linked to a historical claim was not later recovered through the representative member.
How Lanop Can Help
VAT rules become more complex when businesses operate across borders or sit within international group structures.
Lanop Business & Tax Advisors can help businesses review UK VAT refund claims, understand which entity should make the claim, and check historic records for refunds that may now qualify for reconsideration.
With the December 31, 2026, transitional deadline approaching, reviewing outstanding claims now can help businesses avoid unnecessary delays and protect VAT refunds they may be entitled to recover. Contact Lanop today to review your VAT group’s refund position before the deadline.
