If you are a vat registered trader in the UK then you would need to pay vat on most goods and services but did you know that claiming vat back can enhance your business income? In case you have already paid vat once on any services or goods required for your business 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. The UK too has moved to vat and if you operate a business in the UK then you’ll need to make an application 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 in connection with your company depending on the classification of these products or 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 allow you to definitely claim vat back on any goods or services purchased for your business vatcontrol.com/vat. This amount may be recovered even though 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. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged for you then these can be claimed back as soon as 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 year or so after you had first paid your vat on those goods or services check here. 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 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, together with scans of vat invoices which you may have to affix to your application.
Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In the event any other clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is essential to have it right the very first time itself. Your vat refund can be deposited in any 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 converted into sterling pounds prior to it being transferred to your UK bank 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 inform you on the status of the applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your company.