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 services or goods necessary for your business or paid vat on it 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 means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you operate a business in the UK then you’ll have to apply for vat registration when your last 12 month sales turnover touches ?70,000 checkvatnumber. As a vat registered trader you will need to pay and collect vat on all purchases and sales related to your company according to the classification of these products or 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 permit you to 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 can show documentary proof which includes the vat invoice or vat receipt check this out. 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 to you then it may be claimed back after you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You’ll have a time limit of 9 months after the end of the calendar year once 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, along with scans of vat invoices that you might need to affix to your application.
As soon as you receive 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 other clarification or documents are needed then you should expect a delay of four more months and hence 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 the UK. However, this amount will be in the currency of the country of origin and will have to be converted into sterling pounds prior to it being transferred into your UK banking account.
Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and inform you about the status of your applications. The fact is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your business.