If you’re a vat registered trader in the UK then you would have to pay vat on many services and goods but are you aware that claiming vat back can enhance 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 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 when you operate a company in Britain then you’ll need to apply for www.vatcontrol.com vat registration when your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your company according to the classification of those products or services according to the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to claim vat back on any services or goods purchased for the business. This amount may 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. In case you have imported goods to 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 for you then it may be claimed back as soon as you fill 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’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 goods or services. You can 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 the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country where you might have paid vat initially, together 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 your refund claim, it will require around 4 months for your 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 definitely should expect a delay of four more months and therefore 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 the UK. However, this amount will be in the currency of the nation of origin and will need to be changed into sterling pounds before it can be 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 on your behalf and inform you on the status of your applications. The fact is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount directly into your business.