Can UK Businesses Reclaim EU VAT on Business Expenses?
If your UK business pays for EU-based services — cloud hosting (Hetzner, OVH), software licences, contractor invoices, or travel expenses like hotels and fuel in EU countries — you have likely seen EU VAT added to your bill.
Because you are not VAT-registered in the EU, you cannot offset this on an EU return. And because the EU is no longer part of the UK’s VAT system post-Brexit, you cannot recover it through your UK VAT return either.
For the full guide on the 13th Directive refund process, minimum claim amounts, the local registration alternative, the reverse charge fix, and the decision tree for whether a claim is worth pursuing, see:
Reclaiming EU VAT on Expenses — 13th Directive Guide
The UK-EU Reciprocity Basis
Section titled “The UK-EU Reciprocity Basis”EU member states will only grant 13th Directive refunds to businesses from countries that offer a reciprocal arrangement — i.e., where the claimant’s home country also allows EU businesses to reclaim VAT on expenses.
The UK has a reciprocal arrangement. HMRC operates a Manual VAT Refund scheme for non-UK businesses claiming VAT back on expenses incurred in the UK. Because the UK offers this to EU businesses, EU member states generally accept 13th Directive claims from UK businesses.
This reciprocity is the legal basis that makes 13th Directive claims from UK businesses possible. Without it, EU countries would be entitled to refuse UK claims entirely. The UK’s continued operation of this scheme is therefore important for any UK business with significant EU expense VAT to recover.
If you are also advising EU suppliers on whether they can reclaim UK VAT on expenses — for example, a French business that attended a London conference and paid UK VAT on a hotel — they can submit a claim through HMRC’s Manual VAT Refund scheme.
Your UK VAT Return Cannot Help
Section titled “Your UK VAT Return Cannot Help”Pre-Brexit, UK businesses could recover EU VAT through the EU’s 8th Directive refund mechanism, which was integrated into their normal UK VAT return process. That route closed on 31 December 2020.
Since Brexit:
- UK businesses cannot use the 8th Directive (that is only for EU businesses)
- UK businesses cannot claim EU VAT on their UK VAT return
- The only route is the 13th Directive — a separate application to each individual EU country
This is one of the more practically painful consequences of Brexit for UK businesses with regular EU expenses. What was a streamlined process now requires separate applications to each country’s tax authority, often in the local language, with original paper invoices.
Practical Notes for UK Businesses
Section titled “Practical Notes for UK Businesses”The B2B reverse charge fix applies strongly to UK businesses. If you are a UK business buying B2B services from an EU supplier (hosting, software, consulting), the EU supplier should not be charging you EU VAT at all — the place of supply is the UK under B2B rules, and the invoice should be zero-rated with a reverse charge notation. Many EU suppliers default to charging VAT unless you explicitly tell them you are a non-EU business. Request a corrected invoice and a refund from the supplier directly — this is faster and more reliable than a 13th Directive claim. See Selling to EU Businesses for context on B2B supply rules.
Non-Union OSS does not help with input VAT. If you are registered for Non-Union OSS in Ireland for your digital sales, your Irish OSS account cannot be used to recover VAT paid on UK-business expenses in Germany or France. OSS is an output-only system. See Non-Union OSS Guide.
The £90,000 threshold is irrelevant here. Being below the UK VAT registration threshold does not affect your ability to file a 13th Directive claim — it is a direct refund from an EU tax authority, not linked to UK registration status.