If you’re a vat registered trader in the UK you would then have to pay vat on many goods and services but are you aware that claiming vat back can improve 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 certainly make 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 shifted to vat and if you operate a business in Britain then you’ll need to make an application for vat registration once your last Twelve month sales turnover touches ?70,000 checkvatnumber. Being a vat registered trader you will need to pay and collect vat on all purchases and sales related to your company according to the classification of these goods and 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 established vat rules that will allow you to claim vat back on any goods or services purchased for the 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 that includes the vat invoice or vat receipt check my blog. If you have imported goods into the UK after paying vat in the country of origin or have attended a trade fair in a foreign eu country where vat is charged to you then these can be claimed back as soon as you fill the required 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 within the shortest time possible. You will have a time limit of 9 months after the end of the calendar year after you had first paid your vat on those goods or services. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can 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.
As soon as 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 the event any additional clarification or documents are needed then you definitely should expect a delay of four more months and therefore 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 Britain. However, this amount will be in the currency of the nation of origin and will have to be changed into sterling pounds prior to it being transferred to your UK bank account.
Although the process to reclaim vat back is a little tedious, an efficient 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 indeed improve your business cash flow by pumping back that double-taxed amount back into your company.