If you are a vat registered trader in Britain then you would have to pay vat on most goods and services 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 required for your business or paid vat on it in another eu country then you can certainly submit 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 means of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you operate a business in Britain then you will need to make an application for vat registration once your last 12 month sales turnover touches ?70,000. As 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 vatcontrol classification of these products or services according to 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 definitely claim vat back on any goods or services purchased for the business. This amount can be recovered even though 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. In case 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 has been charged for you then these can be claimed back after you fill the necessary vat reclaim form.
You should hire an excellent vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You’ll have a time limit of 9 months following the end of the calendar year 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 need to register at the hmrc website before you fill up the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices that you might have to attach 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 additional clarification or documents are required then you definitely should expect a delay of four more months and therefore it is essential to have it right the 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 before it can be transferred into your UK banking account.
Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds on your behalf and inform 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 business.