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.