If you’re a vat registered trader in the UK then you would have to pay vat on many goods and services but are you aware that claiming vat back can improve your business income? If 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 as a way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you operate a company in Britain then you will have to apply for vat registration when 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 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 goods and services, the hmrc department has established vat rules that will permit you to claim vat back on any goods or services 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 which includes the vat invoice or vat receipt. In case 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 the necessary vat reclaim form.
You should hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You will have a time limit of 9 months after 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 need to register on the hmrc website before you can fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices which you may have to affix to the application.
Once you get a confirmation usually within 15 days of receipt of your 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 the event any additional clarification or documents are required then you definitely 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 may be deposited in a banking account which you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will have to be changed into sterling pounds before it can be transferred to 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 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 directly into your business.