HMRC Brief 8 (2026) VAT Group Refunds: Non-UK Businesses Must Claim Individually

• HMRC Brief 8 (2026) introduces new rules for UK VAT refunds for non-UK businesses in VAT groups.
• Each non-UK group member must now claim UK VAT refunds separately, rather than through the group's representative member.
• Transitional arrangements are in place for claims covering the period from 1 July 2025 to 30 June 2026.
• Businesses can ask HMRC to reconsider certain claims refused since 1 January 2021.
• Compliance officers and legal advisors must update guidance to reflect these changes and review past refused claims.

Each non-UK business that is part of a VAT group must now submit its own separate claim for any UK VAT it has incurred.

His Majesty's Revenue and Customs (HMRC) has announced a crucial update regarding how non-UK businesses operating within a UK VAT group can claim refunds for Value Added Tax. This change, detailed in Revenue and Customs Brief 8 (2026), fundamentally alters the established procedure, moving away from a centralized claim mechanism to an individualized approach for group members.

Previously, the representative member of a VAT group would typically handle refund claims on behalf of all its constituents. However, under the new guidance, each non-UK business that is part of a VAT group must now submit its own separate claim for any UK VAT it has incurred. This represents a significant administrative and compliance adjustment for affected entities.

The HMRC Brief 8 (2026) VAT group refunds policy aims to clarify these revised requirements, ensuring that all parties understand their new obligations. The directive specifically addresses UK VAT refunds for non-UK businesses, emphasizing the shift from collective to individual responsibility in the claims process.

Recognizing the impact of these procedural changes, HMRC has outlined specific transitional arrangements to facilitate a smooth shift for businesses. These provisions are applicable to claims pertaining to the prescribed year spanning from 1 July 2025 to 30 June 2026. This interim period is designed to allow businesses to adapt their internal processes and systems to align with the new individual claim submission mandate.

In addition to future-facing adjustments, the brief also addresses past refund applications. It provides guidance on how businesses can request HMRC to reconsider certain claims that were previously refused. This reconsideration mechanism applies specifically to claims that were denied on or after 1 January 2021, offering a potential avenue for businesses to revisit earlier unfavorable decisions under the light of the updated policy.

The introduction of HMRC Brief 8 (2026) VAT group refunds necessitates a comprehensive review of existing compliance protocols for non-UK businesses operating within UK VAT groups. Legal advisors and compliance officers must promptly update their guidance to reflect the requirement for VAT group separate claims, moving away from the previous reliance on the HMRC VAT group representative member.

This change means that internal procedures for tracking and documenting VAT incurred by individual non-UK group members will need to be robustly enhanced to support direct claim submissions. Furthermore, a critical task for advisors will be to identify and assess any UK VAT refunds non-UK businesses had refused since 1 January 2021, determining their eligibility for reconsideration under the new framework. Awareness of the transitional arrangements VAT claims for the 2025-2026 period is also paramount to ensure ongoing compliance and to avoid potential disruptions in refund processes.

Compliance officers and legal advisors must update their guidance for non-UK businesses in UK VAT groups, ensuring individual members now submit separate VAT refund claims instead of relying on the representative member. They should also review past refused claims for potential reconsideration under the new guidance and be aware of the transitional arrangements for the 2025-2026 period.

Source: Original reporting via Revenue and Customs Brief 8 (2026)