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 income? In case 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 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 if you operate a business in Britain then you will need to make an application for vat registration once your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales related to your business according to the classification of these goods and services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will allow you to claim vat back on any services or goods purchased for your business. 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 to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill up the required vat reclaim form.
You need to hire an excellent vat agent with complete knowledge 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 frame of 9 months following the end of the year or so once you had first paid your vat on those services or goods. 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 can fill up the required 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 have to attach to your 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 case any other clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is essential to get it right the very first time itself. Your vat refund can be deposited in any 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 changed into sterling pounds before it can be transferred into your UK banking account.
Even though 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 on the status of the applications. The fact is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount back into your business.