If you’re a vat registered trader in the UK then you would need to pay vat on most services and goods but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services required for your business or paid vat on it in another eu country then you can certainly submit an application for a vat refund.
Most eu countries have adopted the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you run vatverification.com a company in Britain then you will have to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your company according to the classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such services and goods, the hmrc department has established vat rules that will permit you to claim vat back on any services or goods purchased for the business. This amount can be recovered even though you have paid that vat in another eu country that follows vat, provided you can show documentary proof which includes the vat invoice or vat receipt. If you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged to you then it may be claimed back as soon as you fill up the necessary vat reclaim form.
You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You’ll have a time limit of 9 months following the end of the year or so once you had first paid your vat on those goods or services. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you fill up the required online vat form for vat reclaim. The form will then be sent to the member eu country where you might have paid vat initially, together with scans of vat invoices which you may need to affix to the application.
As soon as you get a confirmation usually within 15 days of receipt of the refund claim, it will take around 4 months for the claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is essential to have it right the very first time itself. Your vat refund can be deposited in a bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds prior to it being transferred into your UK banking account.
Even though the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and notify you about the status of your applications. The fact is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount back into your company.