If you are a vat registered trader in Britain you would then have 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 necessary for your company or paid vat on it in another eu country then you can certainly 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 means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you run a business in the UK then you will have to make an application for vat registration when 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 in connection with your company depending on the classification of these 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 established vat rules that will allow you to claim vat back on any goods or services purchased for the business http://vatcontrol.com/vat. 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. If 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 is charged for you then these can be claimed back after you fill up the required 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 will have a time frame of 9 months after the end of the calendar year once you had first paid your vat on those services or goods check this out. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill up the required online vat form for vat reclaim. The form will then be sent to the member eu country in which you may have paid vat initially, along 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 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 additional clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is essential to have it right the first time itself. Your vat refund can be deposited in a banking account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will have to be changed into sterling pounds prior to it being transferred into your UK banking 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 the applications. The reality is that claiming vat back can certainly improve your business income by pumping back that double-taxed amount directly into your business.