If you are a vat registered trader in Britain you would then have to pay vat on many services and goods but are you aware that claiming vat back can enhance your business income? If 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 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 if you operate a business in Britain then you’ll have to apply for vat registration once your last 12 month sales turnover touches ?70,000. As 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 those products or 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 permit you to definitely 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 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 nation of origin or have attended a trade fair inside a foreign eu country where vat is charged for you then these can be claimed back as soon as you fill up the required 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 after the end of the calendar year once you had first paid your vat on those services or goods. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you fill the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to attach to the application.
As soon as you receive a confirmation usually within 15 days of receipt of the refund claim, it will take 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 hence it is vital to have it right the first time itself. Your vat refund can be deposited in a bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds before it can be transferred into your UK bank account.
Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds on your behalf and notify you about the status of your applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your company.