If you’re a vat registered trader in Britain you would then need 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 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 have adopted 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 if you operate a business in Britain then you will need to apply for vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company depending on the http://vatcontrol.com classification of those products or services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent 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 your 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. If you have imported goods into the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill up the required vat reclaim form.
You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You will 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 at the hmrc website before you can fill the mandatory 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, together with scans of vat invoices that you might need to affix to the application.
As soon as you receive a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for the 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 four more months and hence it is essential to have it right the very first time itself. Your vat refund may be deposited in a banking account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will have to be converted into sterling pounds before it can be transferred to your UK bank 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 your applications. The reality is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount directly into your company.