If you’re a vat registered trader in the UK then you would need to pay vat on most services and goods 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 required 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 have adopted the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you operate a business in the UK then you will need to make an application 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 in connection with 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 services and goods, the hmrc department has produced vat rules that will allow you to definitely claim vat back on any goods or services purchased for your business vatcontrol.com/vat. This amount may be recovered even though you have paid that vat in another eu country that follows vat, provided you can 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 inside a foreign eu country where vat is charged to you then these can be claimed back as soon as you fill up 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 in 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 web site. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill the required online vat form for vat reclaim. The form will then be sent to the member eu country where you might have paid vat initially, together with scans of vat invoices that you might need to affix to the application.
As soon as you get a confirmation usually within 15 days of receipt of your 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 case any additional clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is vital to get it right the very first time itself. Your vat refund may be deposited in a bank account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will have to be changed into sterling pounds prior to it being transferred to your UK bank account.
Although the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds on your behalf and inform you on the status of your applications. The fact is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your company.