If you are a vat registered trader in the UK you would then need to pay vat on many goods and services but are you aware that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any goods or services required for your company or paid vat on it even in another eu country then you can definitely 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 way 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 will have to apply for vatcontrol.com vat registration when 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 related to your company according to the classification of those products or 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 established vat rules that will allow you to claim vat back on any goods or services purchased for the 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 that includes the vat invoice or vat receipt. If 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 to you then it may be claimed back as soon as you fill up the necessary vat reclaim form.
You need to hire an excellent vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You’ll have a time frame of 9 months after the end of the calendar year once you had first paid your vat on those goods or services. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you can fill the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may need to affix 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 the 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 definitely should expect a delay of 4 more months and therefore it is vital to have it right the very first time itself. Your vat refund can be deposited in any bank account that you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will have to be changed into sterling pounds before it can be transferred into your UK banking account.
Although the process to reclaim vat back is a bit tedious, an efficient 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.