If you’re a vat registered trader in the UK then you would have to pay vat on many goods and services but are you aware that claiming vat back can enhance your business cash flow? If you have already paid vat once on any services or goods necessary for your company or paid vat on it in another eu country then you can definitely make an application for a vat refund.
Most eu countries now utilize the system of vat or value added tax on movement of goods and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and if you operate a company in the UK then you’ll have to make an application for vat registration once your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company depending on the classification of these products or services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such services and goods, the hmrc department has produced vat rules that will allow you to definitely claim vat back on any goods or services purchased for the business. This amount can be recovered even though you have paid that vat in another eu country that vat number search follows vat, provided you can 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 has been charged for you then it may be claimed back as soon as you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You will have a time frame of 9 months after 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 offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices that you might need to affix to the application.
Once you receive 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 other clarification or documents are needed then you should expect a delay of 4 more months and therefore it is essential to have it right the 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 before it can be transferred to your UK bank account.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and inform you about the status of the applications. The reality is that claiming vat back can certainly improve your business income by pumping back that double-taxed amount back into your company.