If you’re a vat registered trader in Britain you would then have to pay vat on most goods and services but did you know that claiming vat back can improve your business income? If 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 definitely 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 way of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you run a business in the UK then you’ll have to apply for vat registration once your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your business 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 goods and services, the hmrc department has established vat rules that will permit you to definitely claim vat back on any goods or services purchased for the business. This amount can be recovered even though 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 to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged to you then these can be claimed back after you fill the required vat reclaim form.
You should hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time frame of 9 months following the end of the year or so after you had first paid your vat on those services or goods. You can use several online vat services offered 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 forwarded 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 your 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 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 required then you should expect a delay of 4 more months and therefore it is essential to have it right the very first time itself. Your vat refund can be deposited in any bank account that you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will need to be converted into sterling pounds before it can be transferred to your UK bank account.
Even though the process to reclaim vat back is a little 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 certainly improve your business income by pumping back that double-taxed amount back into your company.