If you’re a vat registered trader in Britain then you would need to pay vat on most goods and services but did you know that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods required for your company or paid vat on it even 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 https://vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you operate a business in the UK then you’ll have to make an application for vat registration when your last Twelve 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 company depending on the classification of those 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 established vat rules that will permit you to definitely claim vat back on any services or goods purchased for the business. This amount may 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. If you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair inside a foreign eu country where vat is charged for you then it may be claimed back as soon as you fill the required vat reclaim form.
You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time frame of 9 months following the end of the year or so once you had first paid your vat on those services or goods. 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 can fill the required online vat form for vat reclaim. The form is then sent to the member eu country where you might have paid vat initially, together with scans of vat invoices that you might have to affix to the application.
Once you get a confirmation usually within 15 days of receipt of the 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 additional clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is essential 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 need to be converted into sterling pounds before it can be transferred into your UK banking account.
Even though the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds on your behalf and inform you on the status of the applications. The fact is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your business.