If you’re a vat registered trader in the UK you would then have to pay vat on most services and goods but are you aware that claiming vat back can enhance your business income? In case you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can definitely make an application for a vat refund.
Most eu countries have adopted 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. The UK too has shifted to vat and if you operate a business in the UK then you will need to make an application for vat registration when your last Twelve 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 vat control classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will permit you to definitely claim vat back on any goods or services purchased for the business. This amount may be recovered even though you have paid that vat in another eu country that follows vat, provided you can show documentary proof that includes the vat invoice or vat receipt. In case 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 to you then it may be claimed back after you fill up the necessary vat reclaim form.
You need to hire an excellent vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You will have a time limit of 9 months after the end of the year or so once you had first paid your vat on those services or goods. 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 fill up 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 that you might need to attach to the application.
Once you receive a confirmation usually within 15 days of receipt of your refund claim, it will take 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 needed then you definitely should expect a delay of 4 more months and hence it is vital to get it right the very 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 nation of origin and will need to be converted into sterling pounds prior to it being transferred into your UK banking account.
Even though the process to reclaim vat back is a little 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 improve your business income by pumping back that double-taxed amount back into your business.