If you’re a vat registered trader in Britain you would then have to pay vat on many goods and services but did you know that claiming vat back can improve your business income? If you have already paid vat once on any services or goods required for your business 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 products and services as a means of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and if you run a business in Britain then you’ll need to make an application for vat registration once your last Twelve month sales turnover touches ?70,000. Being 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 those 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 claim vat back on any services or goods purchased for your business vatcontrol.com/vat. 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 which includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged to you then these can be claimed back after you fill the required vat reclaim form.
You should hire an excellent vat agent with complete knowledge 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 limit of 9 months after the end of the year or so after you had first paid your vat on those goods or services important link. You can 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 fill up 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, along with scans of vat invoices that you might need to attach to the application.
Once you get 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 other clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is vital to get it right the very first time itself. Your vat refund can be deposited in a banking account which you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds before it can be transferred to 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 your applications. The reality is that claiming vat back can indeed enhance your business income by pumping back that double-taxed amount directly into your company.