If you’re a vat registered trader in Britain you would then have to pay vat on many goods and services but did you know that claiming vat back can enhance your business cash flow? If you have already paid vat once on any services or goods required for your company or paid vat on it even in another eu country then you can definitely make 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 www.vatvalidation.com/vat as a means 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 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 depending on the classification of these 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 produced vat rules that will permit you to definitely claim vat back on any goods or services purchased for the business. This amount can 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 in a foreign eu country where vat has been charged to you then it may be claimed back after you fill up the required vat reclaim form.
You should hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You’ll have a time frame 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 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 required online vat form for vat reclaim. The form will then be 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 your application.
Once you receive 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 other clarification or documents are required then you definitely should expect a delay of four more months and therefore it is vital to get it right the first time itself. Your vat refund may be deposited in any bank 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 changed into sterling pounds prior to it being transferred into your UK bank 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 on 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 business.