Even though the United Kingdom adopted the practice of vat or value added tax in 1973, the country?s traders now pay taxes on services and goods as per vat act 1994. The act puts several vat rules and regulations into place for efficient tax collection on taxable sales made in the United Kingdom.

The 1994 VAT act explains the meaning of value added tax on goods and services, specifies applications and exclusions for this tax as well as puts down a process of collecting and paying those taxes to Her Majesty?s Revenue and Customs Department or vat validation hmrc. The act specifies that goods that are imported to the UK with the aim of selling them again are subject to vat. This tax is slotted in 3 different vat rates. Even though the vat act was established in 1994, the vat rates have changed over the years. Several eu countries such as Germany, Sweden, Spain, Poland, Italy, Greece, etc have also implemented their own version of the vat act that is quite similar in principle, although their vat rates too differ according to their classifications.

Vat rates in the UK are broadly based in 3 slabs. The standard vat rate in 2010 was 17.5% but is all set to raise to 20% from January 4, 2011. The reduced vat rates are 5% and then there are also certain goods and services related to foods, children, hospitals, etc that attract zero vat rate or are vat exempt. The vat act 1994 also specifies on how a trader in the United Kingdom can join the vat system by turning into a vat registered trader. Currently, as soon as a trader achieves a vat threshold limit of ?70K in taxable sales then that trader can apply for vat registration, although that move can be done before reaching the limit too.

The vat act also specifies the format of the vat invoice and also the details which a vat registered trader needs to incorporate within that invoice. A trader will need to display the vat number, vat rate and total vat amount in each vat invoice. The trader must also file vat returns at the intervals specified by hmrc vat. The good thing about vat is when any trader has imported goods or services to the UK after paying vat on the same in another eu country then that vat amount could be claimed back through an appropriate vat refund application.

Each eu country has similar rules based on their interpretation of the vat act. Even though the language might be different, most rules are still the same. For example, traders in Poland have to issue a faktura invoice, which is identical to a vat invoice, with the exception that it is issued in the Polish language. Most traders do end up hiring vat agents who have a thorough knowledge on eu vat and uk vat rules as well as complete knowledge of the vat act as well as its amendments so as to efficiently calculate and pay vat, file returns and claim vat refunds.

The vat act was brought to lay down the provisions of following a system of vat in the UK. A number of other countries too have recently switched to vat as a way of collecting taxes on services and goods. In the UK, however, traders need to pay taxes on services and goods as per vat act 1994 while also paying heed to regular changes in the act.

If you're a vat registered trader in Britain you would then need to pay vat on many services and goods but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services necessary for your company or paid vat on it even in another eu country then you can definitely 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 www.vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you run a business in Britain then you'll have to make an application for vat registration once 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 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 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 may be recovered even though 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. If you have imported goods to the UK after paying vat in the country of origin or have attended a trade fair in a foreign eu country where vat has been charged to you then these can be claimed back after you fill up the required vat reclaim form.

You need to hire an excellent 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 frame of 9 months following 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 provided by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you can fill the required online vat form for vat reclaim. The form will then be forwarded 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 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 case any other clarification or documents are needed then you 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 can be deposited in any banking account that you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will have to be converted into sterling pounds prior to it being transferred into your UK bank 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 about 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.

If you have already paid vat on the goods or services again and want to receive the original amount back then while reclaiming vat ensure proper procedures are followed. You may use the vat refund scheme for getting back vat which may already have been paid earlier so as to reduce your costs and even get respite from the issue of double taxation over your goods or services.

While you won't be permitted to deduct the VAT tax amount straight from the next vat return, you still be permitted to claim that amount in the separate vat refund scheme. This scheme is available in the United Kingdom subject to certain conditions. Most eu countries that follow vat usually have such procedures where vat amounts that have previously been paid can be reclaimed. If you're a vat registered trader in the UK that doesn't have vat registration in the country of origin you'll be able to claim any vat paid in the country provided you meet some other vat rules.

You may also claim vat paid in another eu country if you haven't got relief through some other vat scheme. You will need to use a standard vat reclaiming form from the HM revenue and customs or hmrc vat website that looks after the customs, excise and vat department in the UK. On the other hand, since the reclaiming rules might differ abroad, you'll need www.vatcheck.com the services of an expert vat agent well-versed in uk vat and eu vat rules to successfully extract vat refunds from the relevant country. Your agent can act on your behalf as soon as you provide them with a power of attorney or even a letter or authority to do so.

You can go for a vat reclaim no after 9 months in a year or so after you've paid the vat amount. You may first have to register your business name and your agent?s name too in case you plan on reclaiming vat using your agent. You should use the hm vat refunds service that's a part of the vat online services offered by the hmrc vat website in order to reduce time and energy. As soon as you submit the required online vat form you'll be issued a web based reference number that may indicate that the request has been received by the vat refund department.

Although you will not need to send any paper documents, certain eu countries might request a scanned vat invoice to be attached with your vat refund request. Once you've sent your reclaiming request hmrc will be sending a confirmation regarding the same within 15 days even though the concerned eu country will normally offer you a vat refund within 4 months, if all of your documents are in proper order. In the event further information is required from that eu country you'll be able to expect your vat reclaim to get settled after around 8 months of your original application.

To prevent the problem of double taxation, most eu countries which have adopted vat such as the UK offer vat refunds that can be claimed by following proper procedures and using proper applications. You too can claim back vat paid in almost any other eu country that follows vat by reclaiming vat back from that eu country by using the vat refund scheme.