If you are a vat registered trader in the UK you would then have to pay vat on most goods and services but did you know that claiming vat back can improve your business income? In case you have already paid vat once on any services or goods necessary for your business or paid vat on it even in another eu country then you can definitely 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 operate a business in Britain then you will need to make an application for vatcontrol 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 related to your company depending on the classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such goods and services, the hmrc department has established vat rules that will permit you to definitely claim vat back on any services or goods purchased for your business. This amount may be recovered even though you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof which includes the vat invoice or vat receipt. If you have imported goods to the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then these can be claimed back as soon as you fill the necessary vat reclaim form.
You should hire a proficient vat agent with complete understanding 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 calendar year once you had first paid your vat on those services or goods. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you can fill up the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices that you might have to attach to the application.
As soon as you get a confirmation usually within 15 days of receipt of your 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 the event any other clarification or documents are required then you should expect a delay of 4 more months and hence it is vital to get it right the very first time itself. Your vat refund can be deposited in a bank account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will have to be converted into sterling pounds before it can be transferred into your UK bank account.
Even though the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds on your behalf and notify you on the status of the applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your company.