In case you have already paid VAT in a foreign eu country and have to pay for the same again in your own country then you can certainly reclaim vat to lower the burden of double taxation. The whole process could be completed online, particularly if your vat registered business is located in the United Kingdom in which the HM revenue and customs or hmrc department offers several vat online services including the vat refund scheme which makes reclaiming vat vat numbers easy.
In case you have purchased goods from another vat enabled country in the EU such as Spain, Sweden, Hungary, Poland, Italy, Germany, etc in which you don’t have a vat registered business and have already paid vat in the country of origin then you can and must claim that vat back. This can not just lower product cost but will also enable vital funds to circulate back into your organization. Although the vat reclaiming process typically takes between four to 8 months to finish, you can easily appoint a vat agent that is an expert in eu vat and uk vat refund rules. This should help you to concentrate on your organization while your agent tries to reclaim vat on your behalf by utilizing the online vat refund scheme.
Before you can post your first claim for vat, you will need to be a vat registered trader in the UK and will also need to register for vat refund with the hmrc. You will have a maximum of 9 months after the end of the calendar year to make your vat refund application. As you can easily fill out the web based vat form to reclaim any previously paid vat, you won’t have to fill out and dispatch any paperwork but might need to attach scanned copies of vat paid invoices for claims over a stipulated amount. Some countries might also insist on taking a look at original invoices that you might need to dispatch in order to get a successful refund. Again, your vat agent can assist you to complete all necessary formalities.
Many eu countries have their own own version of a vat invoice and have different vat rates for a number of goods and services. For instance, Poland requires its vat registered traders to issue a faktura invoice or vat invoice. However, most eu countries provide some kind of vat refunds to prevent the problem of double taxation on products or services. You simply can’t deduct the vat refund amount within your routine vat returns but will instead have to use the vat refund scheme for the same. If you have made a vat reclaim in a eu country then you will usually receive the refund amount in their currency. You can either transfer the refund amount to an account in that country or directly arrange for the money to be received in your UK banking account by providing them the necessary details including your bank account number.
If you constantly have to import services or goods to the UK where vat has already been paid you then should register for the vat refund scheme provided by the hmrc vat department. As soon as you successfully reclaim vat then you can accurately price your items and services while getting a much needed financial injection in your business.