If you are a vat registered trader in Britain then you would have to pay vat on many goods and services but did you know that claiming vat back can enhance 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 even 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 goods and services https://vatvalidation.com/vat as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you run 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 have to pay and collect vat on all purchases and sales in connection with your company according to the classification of these products or services according to 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 produced vat rules that will permit you to definitely 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 are able to show documentary proof which includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged for you then it may be claimed back after 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’ll have a time frame of 9 months following the end of the year or so once you had first paid your vat on those services or goods. You can 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 required online vat form for vat reclaim. The form is then sent to the member eu country where you may have paid vat initially, along with scans of vat invoices which you may have to attach to your application.
Once you receive a confirmation usually within 15 days of receipt of your 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 the event any other clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is essential to have it right the very first time itself. Your vat refund may be deposited in a bank 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 changed into sterling pounds prior to it being transferred to your UK bank 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 your applications. The reality is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount directly into your company.
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