If you are a vat registered trader in Britain you would then have to pay vat on many services and goods but did you know that claiming vat back can improve your business income? If 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 definitely submit an application for a vat refund.
Most eu countries now utilize the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a business in the UK then you will have to apply for vat registration when your last Twelve 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 business depending on the classification of those goods and services as per 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 your business. This amount may be recovered even if 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 is charged to you then these can be claimed back after you fill up the necessary vat reclaim form.
You should hire a proficient vat agent with complete understanding 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 following the end of the year or so once you had first paid your vat on those goods or services. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill the required online vat form for vat reclaim. The form will then be sent to the member eu country where you may have paid vat initially, along with scans of vat invoices which you may have to affix to the application.
Once you get a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are needed then you should expect a delay of four more months and hence it is vital to get it right the very 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 have to be converted into sterling pounds before it can be transferred to your UK bank account.
Even though the process to reclaim vat back is a bit tedious, an efficient 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 indeed enhance your business income by pumping back that double-taxed amount back into your company.