If you're a vat registered trader in the UK you would then need to pay vat on many goods and services but are you aware that claiming vat back can improve your business cash flow? In case you have already paid vat once on any goods or services required for your company or paid vat on it in another eu country then you can certainly submit 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 www.vatvalidation.com/vat as a way of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a business in Britain then you'll have to make an application for vat registration when your last 12 month sales turnover touches ?70,000. As a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your company depending on the classification of these products or services as per 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 allow you to definitely claim vat back on any goods or services 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 can show documentary proof which 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 for you then these can be claimed back as soon as you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You'll have a time limit of 9 months after the end of the calendar year once 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 have to register at 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 in which you might have paid vat initially, along with scans of vat invoices which you may need to attach to your application.
Once you get a confirmation usually within 15 days of receipt of the 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 case any other clarification or documents are required then you 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 bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will have to be converted into sterling pounds before it can be transferred into your UK banking account.
Even though the process to reclaim vat back is a bit tedious, an efficient 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 income by pumping back that double-taxed amount back into your business.