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 necessary for your company or paid vat on it even 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 if you run a company in the UK then you will need to apply for vat registration when 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 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 your business vatcontrol.com/vat. 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 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 in a foreign eu country where vat is charged to you then it may be claimed back as soon as you fill the necessary 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 within the shortest time possible. You’ll have a time limit of 9 months after the end of the year or so after you had first paid your vat on those goods or services source. You may 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 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, together with scans of vat invoices that you might need to attach to your application.
Once 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 case any other clarification or documents are needed then you definitely should expect a delay of four more months and hence it is essential to get it right the very first time itself. Your vat refund can be deposited in any bank account that you specify within or outside Britain. 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.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and notify you on the status of your applications. The reality is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount directly into your company.