If you’re a vat registered trader in the UK you would then need to pay vat on most goods and services but are you aware that claiming vat back can improve your business cash flow? In case you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can certainly 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 shifted to vat and if you operate a company 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 need to pay and collect vat on all purchases and sales in connection with your business according to 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 established vat rules that will permit you to claim vat back on any services or goods purchased for the business vatcontrol.com/vat. This amount can be recovered even if you have paid that vat in another eu country that follows vat, provided you can show documentary proof that includes the vat invoice or vat receipt. If 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 is charged for you then it may be claimed back after you fill the necessary vat reclaim form.
You need to hire an excellent 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’ll have a time limit of 9 months after the end of the calendar year after you had first paid your vat on those goods or services read more. 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 can fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may have to affix to the application.
As soon as 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 other 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 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 converted into sterling pounds prior to it being transferred into your UK banking account.
Even though the process to reclaim vat back is a bit 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 certainly improve your business income by pumping back that double-taxed amount back into your company.