If you are a vat registered trader in Britain you would then have to pay vat on most goods and services but did you know that claiming vat back can enhance your business cash flow? If you have already paid vat once on any services or goods necessary for your company or paid vat on it 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 goods and services as a way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you run a business in Britain then you will need to apply for vat registration once your last Twelve 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 company according to the vatcontrol classification of these products or services as per the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such goods and services, the hmrc department has produced vat rules that will permit you to claim vat back on any services or goods purchased for the business. This amount can be recovered even though you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof which includes the vat invoice or vat receipt. If you have imported goods to the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill 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 in the shortest time possible. You’ll have a time limit of 9 months following the end of the calendar year after you had first paid your vat on those services or goods. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill the mandatory online vat form for vat reclaim. The form will then be sent to the member eu country where you might have paid vat initially, together with scans of vat invoices that you might have to attach to the application.
As soon as you get 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 required then you definitely should expect a delay of 4 more months and hence it is vital to have it right the first time itself. Your vat refund can be deposited in a bank 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 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 on your behalf and notify you about the status of your applications. The reality is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your company.