VAT Notice 723A: UK VAT Reclaims for Non-UK Businesses Post-Brexit

Context

The VAT Notice 723A scheme was introduced following the UK's departure from the EU, marking a divergence from previous EU VAT refund directives. This mechanism allows overseas businesses to recover UK VAT incurred on supplies received in the UK, provided certain conditions are met. The scheme's reciprocity requirement mandates that the claimant's home jurisdiction must offer comparable tax concessions to UK businesses. Importantly, a refund claim will only be denied on reciprocity grounds if the claimant's country explicitly denies access to UK businesses, not merely due to the absence of a formal agreement.

The claim period mechanics under Notice 723A are strictly defined. The refund year runs from July 1 to June 30, with individual claims required to cover between three and twelve months within this window. This structure necessitates careful calendar management by non-UK businesses to avoid missing deadlines and forfeiting recoverable VAT. The Isle of Man is treated as part of the UK for VAT purposes and falls within this scheme's scope, meaning IoM-sourced VAT is recoverable under the same rules.

Key Rules and Carve-Outs

Two procedural carve-outs merit particular attention. Firstly, import VAT is recoverable under Notice 723A only where no other relief mechanism is available and critically, only if the import activity does not trigger a UK VAT registration liability for the claimant. This creates a compliance decision point: businesses importing goods into the UK must assess their registration exposure before pursuing an import VAT claim under Notice 723A.

Secondly, for VAT group claims, the notice restricts submission rights to the representative member of a VAT group. Individual group members may not file independently. This rule mirrors standard UK VAT group administration but requires non-UK businesses operating through UK-registered group structures to confirm representative member status before filing.

Implications for Non-UK Businesses

The Notice 723A scheme is operationally distinct from EU VAT refund directives and serves as the primary post-Brexit reclaim route for non-established businesses. The reciprocity, claim period mechanics, and import VAT rules are the most consequential compliance variables for businesses navigating this framework. Non-UK businesses must carefully assess their eligibility, ensure they meet the reciprocity requirements, and diligently manage their claim periods to maximize VAT recovery opportunities.

Outlook

As of September 9, 2026, the Notice 723A scheme remains active with no reported changes to its core eligibility criteria. Businesses should continue to monitor any potential updates or amendments to the scheme, particularly in light of evolving post-Brexit trade relations and VAT regulations. The importance of careful compliance with the scheme's rules cannot be overstated, as non-compliance could result in the denial of VAT reclaims.