If you are a vat registered trader in Britain you would then need to pay vat on many goods and services but did you know that claiming vat back can improve your business income? If you have already paid vat once on any goods or services required for your business or paid vat on it in another eu country then you can certainly 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 when you operate a business in the UK then you’ll have to apply for vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company depending on the classification of those products or 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 produced vat rules that will permit you to claim vat back on any goods or services purchased for the business vatcontrol.com/vat. This amount can be recovered even though 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 to the UK after paying vat in the country 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 as soon as you fill the necessary vat reclaim form.
You should hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You will 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 full article. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you fill up the mandatory online vat form for vat reclaim. The form will then be 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 the application.
As soon as you receive a confirmation usually within 15 days of receipt of the refund claim, it will take around 4 months for the claim to be approved from that member country before you can get your vat back. In case any other clarification or documents are required then you should expect a delay of 4 more months and therefore it is essential to have it right the first time itself. Your vat refund can be deposited in any banking account that you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will have to be converted into sterling pounds before it can be transferred into your UK bank account.
Although the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds on your behalf and inform you on the status of your applications. The fact is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your company.