If you’re a vat registered trader in Britain then you would need to pay vat on most goods and services but did you know that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any goods or services required for your company or paid vat on it even 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 means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you run a company vatverification in the UK then you’ll need to apply for vat registration once your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales related to your business according to the classification of those goods and services according to the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to claim vat back on any goods or services purchased for the business. This amount can be recovered even though 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 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 for you then these can be claimed back after you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time limit of 9 months following the end of the year or so after you had first paid your vat on those services or goods. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you fill up the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices which you may 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 case any other clarification or documents are required then you should expect a delay of 4 more months and therefore it is vital to have it right the first time itself. Your vat refund can be deposited in any banking account that you specify within or outside the UK. 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.
Although the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds as your representative and notify you about the status of the applications. The reality is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount directly into your business.