If you’re a vat registered trader in the UK 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? In case you have already paid vat once on any services or goods required for your company or paid vat on it in another eu country then you can definitely make an application for a vat refund.
Most eu countries now utilize the system of vat or value added tax on movement of products and services as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you run a business in the UK then you’ll have to make an application 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 related to your company according to 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 the business http://vatcontrol.com/vat. This amount may be recovered even if 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 country 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 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 in the shortest time possible. You’ll have a time frame of 9 months after the end of the year or so once you had first paid your vat on those services or goods blog link. 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 can fill the mandatory online vat form for vat reclaim. The form will then be sent to the member eu country where you may have paid vat initially, along with scans of vat invoices that you might have to attach to the application.
As soon as you receive a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for the 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 4 more months and hence it is vital to have it right the first time itself. Your vat refund may be deposited in a 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 little tedious, a competent vat agent can apply for vat refunds on your behalf and inform you about the status of your applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your company.