If you're a vat registered trader in the UK then you would have to pay vat on most goods and services but did you know that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any services or goods 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 now utilize 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. Great Britain too has moved to vat and when you run a company in the UK then you'll have to make an application for vat registration when your last 12 month sales turnover touches ?70,000 checkvatnumber. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company depending on the classification of those goods and 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 definitely claim vat back on any services or goods 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 can show documentary proof which includes the vat invoice or vat receipt get more info. If you have imported goods to 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 for you then it may be claimed back as soon as you fill up the required vat reclaim form.
You should hire an excellent 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 frame of 9 months following the end of the calendar year after you had first paid your vat on those goods or services. You may 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 fill the required online vat form for vat reclaim. The form is then 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.
Once 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 case any additional clarification or documents are required then you should expect a delay of four more months and therefore it is vital to have it right the very first time itself. Your vat refund may be deposited in a bank account which you specify within or outside Britain. 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 bank 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 inform you about the status of your applications. The reality is that claiming vat back can certainly improve your business income by pumping back that double-taxed amount back into your company.