If you are a vat registered trader in the UK then you would have to pay vat on most goods and services but did you know that claiming vat back can enhance your business cash flow? If you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can certainly make 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 as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and if you operate a business in Britain then you’ll have to apply for vatcontrol.com 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 those goods and services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, the hmrc department has produced vat rules that will allow you to claim vat back on any services or goods 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. In case you have imported goods into the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill the required vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that 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 year or so after you had first paid your vat on those goods or services. 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 the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, along with scans of vat invoices which you may need to attach to the application.
As soon as 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 additional clarification or documents are required then you should expect a delay of 4 more months and therefore it is vital to get it right the very first time itself. Your vat refund may 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 need to be converted into sterling pounds prior to it being transferred to your UK banking account.
Even though the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and inform you on the status of the applications. The reality is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your company.