If you are a vat registered trader in the UK you would then have to pay vat on most services and goods but did you know that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any services or goods required for your business or paid vat on it even in another eu country then you can definitely 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 means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you run a company vatverification.com in Britain then you will need to make an application for vat registration when your last 12 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 those 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 allow you to claim vat back on any goods or services purchased for the business. This amount may be recovered even if you have paid that vat in another eu country that follows vat, provided you can show documentary proof which includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation 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 as soon as you fill up the necessary vat reclaim form.
You need to hire an excellent vat agent with complete knowledge 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 limit of 9 months after the end of the calendar year once you had first paid your vat on those goods or services. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill up the required online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, together with scans of vat invoices that you might need to affix to the application.
Once you receive a confirmation usually within 15 days of receipt of the 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 required then you definitely should expect a delay of 4 more months and hence it is vital to get it right the first time itself. Your vat refund can be deposited in any bank account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need 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 little tedious, a competent 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 certainly improve your business cash flow by pumping back that double-taxed amount back into your business.