If you are a vat registered trader in the UK then you would need to pay vat on most goods and services but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any goods or services necessary for your business 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 means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you operate a business in Britain then you will have to apply 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 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, to prevent 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 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 that includes the vat invoice or vat receipt. In case you have imported goods into 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 should hire an excellent vat agent with complete understanding of uk vat and eu vat rules so 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 services or goods. You can use several online vat services provided 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 forwarded to the member eu country where you may 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 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 other clarification or documents are needed then you definitely should expect a delay of four 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 nation of origin and will have 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 inform you about the status of your applications. The reality is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount back into your company.