If you are a vat registered trader in the UK then you would have to pay vat on many goods and services but did you know 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 in another eu country then you can certainly submit an application for a vat refund.
Most eu countries now utilize the system of vat or value added tax on movement of goods and services as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you operate a business in Britain then you will need to make an application for vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your business depending on the vat control classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any services or goods purchased for the business. This amount can be recovered even if you have paid that vat in another eu country that follows vat, provided you can show documentary proof that 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 in a foreign eu country where vat has been charged to you then these can 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 that your vat refund claim is passed within the shortest time possible. You will have a time frame of 9 months after the end of the year or so once 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 mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices that you might have to attach to your application.
Once you receive a confirmation usually within 15 days of receipt of your 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 hence it is essential to have it right the very first time itself. Your vat refund can be deposited in a bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will need 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, a competent vat agent can apply for vat refunds as your representative and inform you about the status of your applications. The fact is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount back into your company.