If you’re a vat registered trader in Britain then you would have to pay vat on many services and goods but are you aware that claiming vat back can improve your business income? If 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 certainly 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 vat verification in Britain then you will have to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will need to pay and collect vat on all purchases and sales related to your business depending on 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 claim vat back on any goods or services purchased for your business. This amount can be recovered even though you have paid that vat in another eu country that follows vat, provided you can 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 inside a foreign eu country where vat has been charged for you then it may be claimed back after you fill up the required vat reclaim form.
You should hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so 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 calendar year 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 have to register on the hmrc website before you can fill up the required online vat form for vat reclaim. The form is then sent to the member eu country where you might have paid vat initially, together with scans of vat invoices that you might need to attach to your application.
Once 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 needed then you definitely should expect a delay of 4 more months and therefore it is vital to get it right the 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 country of origin and will need to be converted into sterling pounds before it can be 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 on your behalf and notify you on the status of the applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your business.