If you’re a vat registered trader in the UK you would then need to pay vat on most goods and services but are you aware that claiming vat back can enhance your business income? In case you have already paid vat once on any services or goods necessary for your business or paid vat on it even 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 products and services as a way of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you operate a business in Britain then you will have to make an application 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 related to your company according to 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 claim vat back on any services or goods purchased for the business vatcontrol.com/vat. This amount can 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. If you have imported goods into 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 for 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 your vat refund claim is passed in the shortest time possible. You’ll have a time limit of 9 months after the end of the calendar year once you had first paid your vat on those services or goods more helpful hints. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you fill the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices which you may have to affix to your application.
Once you get 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 the event any additional clarification or documents are required then you should expect a delay of four more months and therefore it is vital to get it right the very first time itself. Your vat refund may 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 on your behalf and notify you on the status of the applications. The fact is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your business.