If you are a vat registered trader in Britain you would then need to pay vat on most goods and services but are you aware 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 make an application for a vat refund.
Most eu countries have adopted 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 moved to vat and if you run a business in the UK then you will have to apply for vat registration when your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your business depending on the vatcontrol.com 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 permit you to definitely 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 has been charged for you then it may be claimed back as soon as you fill the required 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 within the shortest time possible. You’ll have a time limit of 9 months following the end of the year or so once 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 at the hmrc website before you fill the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices which you may need to affix to your application.
Once you get a confirmation usually within 15 days of receipt of the 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 the event any additional clarification or documents are required then you should expect a delay of four more months and therefore it is essential to get it right the first time itself. Your vat refund can be deposited in any banking account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds before it can be transferred to your UK bank 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 notify you on the status of the applications. The fact is that claiming vat back can indeed enhance your business income by pumping back that double-taxed amount directly into your company.