If you are a vat registered trader in Britain then you would have to pay vat on most goods and services but are you aware 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 in another eu country then you can certainly make an application for a vat refund.
Most eu countries now utilize 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. Great Britain too has moved to vat and if you operate vat verification a business in Britain then you will have to apply for vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your company according to the classification of these products or services according to 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 permit 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 to the UK after paying vat in the nation of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then it may be claimed back after you fill the necessary vat reclaim form.
You should hire an excellent vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You’ll 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 on the hmrc website before you fill up the required online vat form for vat reclaim. The form is then sent to the member eu country in which you may 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 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 additional clarification or documents are required then you 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 may be deposited in any banking account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will have to be changed into sterling pounds prior to it being transferred to 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 about 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 back into your company.