If you’re a vat registered trader in the UK then you would have to pay vat on many services and goods but did you know that claiming vat back can improve your business cash flow? In case you have already paid vat once on any goods or services required for your business 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 as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and if you operate a company in the UK then you will have to make an application for vat registration when your last 12 month sales turnover touches ?70,000 www.checkvatnumber.com. Being a vat registered trader you will have to pay and collect vat on all purchases and sales related to your company depending on the classification of these products or services according to 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 definitely claim vat back on any goods or services purchased for your business. This amount can be recovered even if 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 read more here. If 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 as soon as you fill up the necessary vat reclaim form.
You need to hire a proficient 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’ll have a time frame of 9 months after the end of the year or so after you had first paid your vat on those services or goods. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you can fill up the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to attach to your application.
As soon as you receive a confirmation usually within 15 days of receipt of the 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 other clarification or documents are required then you should expect a delay of 4 more months and hence it is vital to get it right the first time itself. Your vat refund may be deposited in any banking account that 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 prior to it being transferred to your UK banking account.
Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds on your behalf and notify you on the status of the applications. The fact is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount directly into your company.