If you’re a vat registered trader in Britain then you would need to pay vat on many 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 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 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 shifted to vat and if you operate a business in the UK then you’ll need to apply for http://vatcontrol.com vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales related to your company according to the classification of those goods and services according to 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 allow you to claim vat back on any services or goods purchased for your business. This amount may be recovered even though you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof that 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 is charged for you then it may be claimed back as soon as you fill up the necessary vat reclaim form.
You need to hire an excellent vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You will have a time frame of 9 months following the end of the calendar year after you had first paid your vat on those goods or services. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you fill the required online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, along with scans of vat invoices that you might have to affix to the application.
As soon as you receive 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 case any additional clarification or documents are required then you should expect a delay of four more months and hence it is essential to get it right the first time itself. Your vat refund may be deposited in any banking account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will need to be changed into sterling pounds prior to it being transferred to your UK bank account.
Even though the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and inform you on the status of the applications. The reality is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount directly into your business.