If you are a vat registered trader in Britain you would then need to pay vat on most services and goods but are you aware that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can definitely submit an application for a vat refund.
Most eu countries now utilize 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. The UK too has moved to vat and when you operate a business in Britain then you will have to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. As 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 those products or services as per 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 allow you to definitely claim vat back on any goods or services purchased for the business http://vatcontrol.com/vat. This amount may be recovered even if you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof that includes the vat invoice or vat receipt. In case you have imported goods into the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged for you then these can be claimed back after you fill up the necessary vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You’ll have a time limit of 9 months after the end of the year or so after you had first paid your vat on those services or goods my link. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill the required online vat form for vat reclaim. The form will then be sent to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may need to affix to the application.
Once you receive a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for the claim to be approved from that member country before you can get your vat back. In the event any additional 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 first time itself. Your vat refund may be deposited in a banking account which you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will need to be converted into sterling pounds before it can be transferred into your UK banking account.
Although 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 on the status of your applications. The reality is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount back into your business.