If you are a vat registered trader in Britain you would then have to pay vat on most goods and services but are you aware that claiming vat back can enhance your business cash flow? If you have already paid vat once on any services or goods required for your company 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 way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you run a business in the UK then you will have to apply for vatcontrol vat registration once 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 related to your business according to the classification of these goods and 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 allow you to definitely 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 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 in 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 should hire a proficient 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 following the end of the year or so after you had first paid your vat on those services or goods. You can 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 can fill up the mandatory online vat form for vat reclaim. The form is then sent 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 the application.
Once you receive a confirmation usually within 15 days of receipt of your refund claim, it will require 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 needed then you should expect a delay of four more months and hence it is essential to get it right the first time itself. Your vat refund may be deposited in any bank account that you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will have to be changed into sterling pounds before it can be transferred to your UK bank account.
Even though the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds as your representative and inform you about the status of your applications. The reality is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your business.