If you’re a vat registered trader in Britain then you would need to pay vat on most services and goods but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services necessary for your company or paid vat on it even in another eu country then you can definitely make 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. Great Britain too has moved to vat and if you run a company in Britain then you’ll have to apply for vatcontrol vat registration when your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company according to the classification of these goods and 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 your business. This amount may be recovered even if you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof which 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 in a foreign eu country where vat has been charged for you then it may be claimed back as soon as you fill the necessary vat reclaim form.
You need to hire an excellent 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 will have a time limit 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 offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you may have paid vat initially, together with scans of vat invoices that you might have to affix to your application.
Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will take 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 very first time itself. Your vat refund may be deposited in a banking account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds before it can be transferred into your UK bank 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 about the status of the applications. The reality is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount directly into your business.