If you are a vat registered trader in the UK you would then have to pay vat on many services and goods but did you know that claiming vat back can enhance 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 certainly 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 www.vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a business in the UK then you will have to apply 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 related to your business depending on the classification of these goods and services as per the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any goods or services purchased for your business. 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 to the UK after paying vat in the country 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 should hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time frame of 9 months after the end of the calendar year once you had first paid your vat on those services or goods. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you can fill up 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 have to attach to the application.
Once you get a confirmation usually within 15 days of receipt of the refund claim, it will take around 4 months for your claim to be approved from that member country before you can get your vat back. In the event any other clarification or documents are needed 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 bank account that 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 before it can be transferred into your UK banking account.
Although 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 on the status of your applications. The fact is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount directly into your business.