If you’re a vat registered trader in the UK you would then have to pay vat on most services and goods but did you know that claiming vat back can enhance 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 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 means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you run a company in the UK then you’ll have to apply for www.vatcontrol.com vat registration once 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 according to the classification of those products or services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, 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 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. In case you have imported goods into 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 for you then it may be claimed back as soon as you fill the required vat reclaim form.
You should hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed in 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 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 up the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you may have paid vat initially, along with scans of vat invoices which you may have to attach to your application.
Once you receive a confirmation usually within 15 days of receipt of your 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 the event any other clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is essential to have it right the first time itself. Your vat refund can be deposited in any bank account that you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will have to be changed into sterling pounds before it can be transferred into your UK bank account.
Although the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and notify you about the status of your applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your company.