If you’re 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 services or goods required for your business or paid vat on it in another eu country then you can definitely 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 way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you run a business in Britain then you will have to make an application for 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 in connection with your business depending on the classification of these products or services as per 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 permit you to definitely claim vat back on any goods or services purchased for your business http://vatcontrol.com/vat. This amount can be recovered even though you have paid that vat in another eu country that follows vat, provided you can show documentary proof which 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 for you then it may be claimed back as soon as you fill up the required vat reclaim form.
You should hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You will 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 site here. 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 fill up the required online vat form for vat reclaim. The form is then forwarded to the member eu country where you may have paid vat initially, along with scans of vat invoices which you may have 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 your claim to be approved from that member country before you can get your vat back. In the event any other clarification or documents are required then you definitely should expect a delay of four more months and hence it is vital to get it right the very first time itself. Your vat refund may 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 banking 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 income by pumping back that double-taxed amount directly into your business.