If you’re a vat registered trader in the UK then you would have to pay vat on most services and goods but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any goods or services necessary 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 goods and services as a means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you operate a business in Britain then you will have to make an application for vat registration once 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 related to your business according to the www.vatcontrol.com classification of these products or services as per the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, 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 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 is charged to you then it may be claimed back after you fill 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’ll have a time frame of 9 months after 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 provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you fill the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, along with scans of vat invoices which you may need to affix to your application.
Once you get 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 other clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is vital to get it right the very first time itself. Your vat refund can be deposited in a bank 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 prior to it being transferred to 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 on the status of your applications. The fact is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount back into your business.