If you are a vat registered trader in Britain you would then have to pay vat on most goods and services but did you know that claiming vat back can improve your business cash flow? If you have already paid vat once on any goods or services necessary for your company or paid vat on it even 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 goods and services as a way of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you run a company vat verification in the UK then you will need to apply for vat registration when your last 12 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 company depending on the classification of those 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 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 which 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 inside a foreign eu country where vat is charged to you then these can be claimed back after you fill up the required vat reclaim form.
You should hire a proficient 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’ll have a time limit of 9 months after the end of the calendar year once 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 need to register on the hmrc website before you can fill the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices that you might have to attach to the application.
Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for the 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 definitely should expect a delay of 4 more months and hence it is vital to get it right the very first time itself. Your vat refund can be deposited in any banking account that you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be converted 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, an efficient vat agent can apply for vat refunds on your behalf and notify you about the status of the applications. The fact is that claiming vat back can indeed enhance your business income by pumping back that double-taxed amount directly into your company.