AI agents for business finance: what they can and can't do
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The short answer
Nigeria's VAT rules let a taxable person recover input VAT and claim refunds of excess credit, but we found no published route for a UK company that is not registered for Nigerian VAT to reclaim VAT it was charged in Nigeria. In practice the money is usually lost unless your company registers because it makes taxable supplies in Nigeria, or a Nigerian entity in your group incurs the cost; the better fix is to stop being charged in the first place where services are exported.
What Nigerian law allows, and for whom
PwC's Worldwide Tax Summaries for Nigeria (reviewed 29 May 2026), describing the regime under the Nigeria Tax Act 2025, sets out these VAT points:
- The standard rate is 7.5%.
- Input VAT on services and fixed assets tied to taxable supplies can be recovered against output VAT; where inputs serve both taxable and non-taxable supplies, only the taxable share can be deducted.
- Input VAT can be claimed within five years after the end of the period in which it was incurred.
- A taxable person is entitled to a refund of excess VAT not used as a credit, on request; refund requests are made within 12 months of the transaction, and refunds are due within 30 days or can be offset against other federal taxes.
- Exported services are zero-rated.
Every one of those rights belongs to a taxable person inside the Nigerian VAT system. PwC's page does not describe any procedure for an unregistered non-resident business to reclaim VAT, and we did not find one on official pages. Unlike some countries, Nigeria does not appear to run a refund scheme for foreign businesses that are not registered.
Where UK companies get charged Nigerian VAT
| Situation | Should Nigerian VAT be charged? | What to do |
|---|---|---|
| A Lagos contractor or agency supplies services to your UK company | Exported services are zero-rated, so normally no | Ask the supplier to zero-rate and show it on the invoice |
| Hotels, meals and transport while staff visit Nigeria | Yes, these are consumed in Nigeria | Treat it as part of the travel cost |
| Co-working space or office rent in Lagos | Depends on the supply | Check the invoice and ask why VAT is shown |
| Goods bought in Nigeria for use there | Yes | Usually a cost unless a Nigerian entity buys them |
The first row is where most money is lost. A Lagos supplier who adds 7.5% to an invoice for work delivered to a UK client may simply be using a domestic template. The Nigeria library explains the supplier's side in VAT on services to foreign clients.
Worked example
This is an example only. A Lagos design studio invoices your UK company ₦4,000,000 plus 7.5% VAT of ₦300,000 for a brand project delivered to the UK. If the service qualifies as an export, the studio should have zero-rated it and invoiced ₦4,000,000. If you pay ₦4,300,000, the ₦300,000 is not UK VAT, cannot go on your UK return, and, unless your company is registered in Nigeria, has no obvious route back to you. Asking for a corrected invoice before paying saves the whole ₦300,000.
When registering in Nigeria makes sense
Registration is driven by what you sell in Nigeria, not by what you buy there. If your UK company makes taxable supplies to Nigerian customers, it may already need to register, and once registered it can recover input VAT on costs used for those supplies. Under the 2025 Act, small businesses with turnover of ₦100 million or less and fixed assets of ₦250 million or less are exempt from registering and charging VAT, though professional service providers are excluded from that exemption (Forvis Mazars, 16 March 2026). Being exempt also means no input VAT recovery. The registration question is covered in Nigerian VAT registration for a UK-owned company and, for digital sellers, in significant economic presence.
Using a Nigerian entity
If your group has a Nigerian subsidiary that makes taxable supplies, costs incurred in Nigeria for its business can be bought by the subsidiary, which can then claim the input VAT within the rules above. This only works if the cost is really the subsidiary's; recharging costs between group companies raises transfer pricing questions, covered in transfer pricing for a UK-Nigeria group.
What to check first
- Does the supplier's invoice show 7.5% VAT on a service delivered to your UK company? Ask whether it should be zero-rated.
- Is your company registered for Nigerian VAT? If not, assume VAT paid in Nigeria is a cost.
- Do you make taxable supplies in Nigeria that would require registration anyway?
- Would a Nigerian group company be the right buyer for local costs?
Where Pryme fits
A Pryme Business Account lets a UK company pay Nigerian suppliers in naira through Send, with the Finance agent able to flag invoices that show Nigerian VAT on exported services before a person approves payment. The rate and the fee for any conversion are shown before you approve.
Questions people ask
Can a UK company claim back Nigerian VAT?
Only within the Nigerian VAT system. Refund rights belong to taxable persons; we found no published route for an unregistered foreign business.
Should a Nigerian supplier charge VAT to a UK client?
Exported services are zero-rated under the 2025 Act, per PwC's summary, so a service delivered to a UK client should not normally carry 7.5% VAT.
How long do I have to claim input VAT in Nigeria?
PwC's summary says input VAT can be claimed within five years after the period it was incurred, and refund requests are made within 12 months of the transaction.
Is Nigerian VAT on a business trip recoverable?
Not by an unregistered UK company in practice. Treat it as part of the travel cost.
Sources
- PwC Worldwide Tax Summaries: Nigeria, other taxes incl. VAT (reviewed 29 May 2026) · accessed Oct 2026
- Forvis Mazars: 2025 Nigeria Tax Act, VAT key business changes (16 Mar 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.