If you’re a vat registered trader in the UK then you would have to pay vat on many 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 required for your company or paid vat on it in another eu country then you can definitely submit an application for a vat refund.
Most eu countries have adopted 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 run a business in the UK then you will need to make an application for vat registration once your last 12 month sales turnover touches ?70,000 checkvatnumber.com. As a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your business depending on the classification of those products or services according to 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 claim vat back on any services or goods 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 which includes the vat invoice or vat receipt clicking here. If you have imported goods to the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat has been charged to 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 within the shortest time possible. You will have a time limit 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 provided by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill the required online vat form for vat reclaim. The form is then sent to the member eu country where you may have paid vat initially, along with scans of vat invoices that you might need to affix to your application.
Once you get a confirmation usually within 15 days of receipt of the 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 required then you should expect a delay of four more months and hence it is vital to have it right the first time itself. Your vat refund can be deposited in any bank 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 before it can be transferred to 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 inform you about the status of the applications. The reality is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your business.