As a vat registered trader in the UK like a number of other eu countries which have adopted VAT or value added tax, you should make sure to file for for vat claims to reclaim vat back. If you have purchased services or goods where vat was already charged, even in another eu country, you are able to certainly claim that vat amount to provide a boost to the business cash-flow.
As a business you are able to claim vat back only on goods and services related to your organization and not for your personal use. This vat is referred to as input tax by the HM Revenue and Customs or hmrc department vatnumbers that handles customs, excise and vat departments in the UK. You can reclaim vat charged irrespective of the rates, whether it is the regular, reduced or zero rate. However, you can expect to not be able to claim vat on vat exempt goods as well as certain exceptions.
Considering that the procedure for filing for vat refunds is quite complex and time consuming, particularly for services or goods imported from other eu countries, you should utilize the services of an expert vat agent that’s totally familiar with the latest uk vat and eu vat rules. Several agents charge you a fee based on a amount of the vat reclaim amount once it has been approved and will not charge any fees if ever the claim does not materialize. This facility should be accepted by you to avoid paying money out of your pocket to your agent since vat claims usually take between four to 8 months to come to a successful conclusion.
You will first have to register yourself online with the hmrc vat website if you wish to use all vat services offered by the department. Even if you want to file a vat claim for vat paid in a foreign eu country, you still have to apply for vat reclaim with hmrc first and also provide all necessary vat documents including vat receipts so that your claim can be processed further. Hmrc will forward the application to the mentioned country and you may additionally need to send additional documents such as your vat certificate along with the original vat invoice, if desired by that country. If all of your documents are found to be in order in the first attempt itself, you could receive your vat refund within 4 months, albeit in the currency of the foreign eu country, which may be changed into sterling pounds whenever you transfer it to your UK bank account.
Reclaiming vat can provide relief to your business by lowering costs and injecting vital funds into your business. If you regularly participate in trade shows in member eu countries and pay vat in those countries, or import goods into the UK where vat has already been paid then you should go for vat refunds as this move will lower the cost of your goods while enabling you to legally claim doubly paid tax back from the government.
When you do turn into a vat registered trader in the UK then you should explore all legal means to recover any tax that has already been paid on goods or services used by your business. You don’t need to invest your personal time or staff while making vat claims since a competent vat agent can do precisely the same on your behalf and only collect fees when your refund claim is eligible.