If you are a vat registered trader in Britain you would then have to pay vat on many 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 required 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 now utilize the system of vat or value added tax on movement of products and services as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and if you operate a business in the UK then you’ll have to apply for vat control vat registration once your last 12 month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales related to your business 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 allow you to definitely claim vat back on any goods or services purchased for the business. This amount can 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 country of origin or have attended a trade fair in a foreign eu country where vat is charged to you then it may be claimed back after you fill the required vat reclaim form.
You should 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 will have a time limit of 9 months following the end of the calendar year after you had first paid your vat on those services or goods. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you can fill the mandatory 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 that you might need to attach to your application.
As soon as you get a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are needed 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 may be deposited in any banking account which you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need to be changed 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 improve your business cash flow by pumping back that double-taxed amount back into your company.