If you are a vat registered trader in Britain then you would need to pay vat on most goods and services but are you aware that claiming vat back can improve your business cash flow? In case you have already paid vat once on any services or goods required for your business or paid vat on it in another eu country then you can definitely 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 means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate vatverification a company in Britain then you’ll need to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. Being 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 as per the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such goods and services, the hmrc department has established vat rules that will allow you to claim vat back on any services or goods purchased for your business. This amount can be recovered even if you have paid that vat in another eu country that follows vat, provided you can 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 country of origin or have attended a trade fair in 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 should hire an excellent vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You’ll have a time limit of 9 months after the end of the calendar year once you had first paid your vat on those services or goods. 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 is then sent to the member eu country in which you may have paid vat initially, along with scans of vat invoices which you may need to affix to your application.
As soon as you get 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 the event any additional clarification or documents are required then you definitely should expect a delay of four more months and hence it is vital to get it right the very first time itself. Your vat refund can be deposited in any banking account which 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.
Although the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds as your representative and notify you about the status of the applications. The fact is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your company.