If you are a vat registered trader in the UK you would then need to pay vat on many 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 goods or services necessary for your company or paid vat on it in another eu country then you can certainly make an application for a vat refund.
Most eu countries now utilize 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 company in the UK then you will have 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 business according to the classification of those 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 vat number search follows vat, provided you are able to show documentary proof which includes the vat invoice or vat receipt. If you have imported goods to 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 as soon as you fill the required vat reclaim form.
You need to hire a proficient 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 following the end of the year or so after you had first paid your vat on those services or goods. 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 can fill up the mandatory online vat form for vat reclaim. The form is then sent to the member eu country where you might have paid vat initially, together with scans of vat invoices which you may need to attach to the application.
As soon as you receive a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for your 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 essential to have it right the first time itself. Your vat refund may be deposited in a bank account that you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds prior to it being transferred into your UK bank account.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and notify you on the status of your applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount directly into your company.