If you have already paid VAT in a foreign eu country and have to pay for the same again throughout your home country then you can reclaim vat to reduce the burden of double taxation. The whole process could be completed online, especially if your vat registered organization is situated in the UK where the HM revenue and customs or hmrc department offers several vat online services including the vat refund scheme that makes reclaiming vat easy.
In case you have purchased goods from another vat enabled country within the EU like Spain, Sweden, Hungary, Poland, Italy, Germany, etc where you don’t have a vat registered business and still have already paid vat in the country of origin then you can and must claim that vat back. This will not just reduce your product cost but will also enable vital funds to flow back to your business. Even though the vat reclaiming process usually takes between four to 8 months to finish, you can simply appoint a vat agent vatnumbers that is a specialist in eu vat and uk vat refund rules. This will help you to concentrate on your organization while your agent tries to reclaim vat on your behalf by utilizing the online vat refund scheme.
Before you post your first claim for vat, you will have to be a vat registered trader in the UK and will also have to register for vat refund with the hmrc. You will have a maximum of 9 months following the end of a year or so to make your vat refund application. Since you can simply fill out the online vat form to reclaim any previously paid vat, you will not have to complete and dispatch any paperwork but should attach scanned copies of vat paid invoices for claims over a stipulated amount. Some countries may also insist on looking at original invoices that you might have to dispatch in order to get a successful refund. Again, your vat agent can assist you to complete all necessary formalities.
Many eu countries have their own version of the vat invoice and also have different vat rates for various goods and services. For instance, Poland requires its vat registered traders to issue a faktura invoice or vat invoice. However, most eu countries provide some form of vat refunds to avoid the problem of double taxation on products or services. You cannot deduct the vat refund amount in your routine vat returns but will instead have to use the vat refund scheme for the same. In case you have made a vat reclaim in a eu country then you’ll usually receive the refund amount in their currency. You can either transfer the refund amount to a merchant account in the country or directly arrange for the money to be received within your UK bank account by giving them the necessary details as well as your bank account number.
If you constantly need to import goods or services to the UK where vat was already paid then you should sign up for the vat refund scheme provided by the hmrc vat department. Once you successfully reclaim vat you’ll be able to accurately price your products and services while receiving a much needed financial injection in your business.