If you are a vat registered trader in Britain then you would have to pay vat on many goods and services but are you aware 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 even 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. Great Britain too has shifted to vat and when you operate a company in Britain then you will need to apply for vat registration when your last 12 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 business according to the vat control classification of those goods and services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such services and goods, the hmrc department has established vat rules that will allow you to claim vat back on any services or goods purchased for the 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. If 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 to 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 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 frame of 9 months after the end of the year or so after you had first paid your vat on those goods or services. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you fill up the mandatory online vat form for vat reclaim. The form is then sent to the member eu country in which you may have paid vat initially, together with scans of vat invoices which you may have to affix to your application.
Once you get a confirmation usually within 15 days of receipt of your refund claim, it will take 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 should expect a delay of 4 more months and hence it is essential 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 prior to it being transferred to your UK banking account.
Although the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and notify you on the status of your applications. The reality is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount directly into your business.