If you're a vat registered trader in Britain you would then need to pay vat on most services and goods but did you know that claiming vat back can enhance your business cash flow? If you have already paid vat once on any goods or services necessary for your company 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. Great Britain too has shifted to vat and when you run a company in Britain then you'll have to apply for vat registration once 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 related to your company according to the classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such services and goods, the hmrc department has established 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 though you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof that includes the vat invoice or vat receipt. If you have imported goods into the UK after paying vat in the nation 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 after 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 calendar year once you had first paid your vat on those goods or services. You can 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 the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you may have paid vat initially, along with scans of vat invoices which you may need to attach to your application.
As soon as you get a confirmation usually within 15 days of receipt of the 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 the event any additional clarification or documents are needed then you should expect a delay of 4 more months and hence it is essential to have it right the first time itself. Your vat refund may be deposited in a banking 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 changed into sterling pounds prior to it being 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 as your representative and notify you on the status of the applications. The fact is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount directly into your company.