If you are a vat registered trader in Britain then you would have to pay vat on many goods and services but did you know that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods required for your company or paid vat on it in another eu country then you can definitely make 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 means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a company in Britain then you will need to apply for vat registration when your last 12 month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales related to your company depending on the classification of those products or services as per 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 produced vat rules that will permit you to definitely 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 vat number search follows vat, provided you can 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 inside a foreign eu country where vat has been charged for you then it may be claimed back after 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 within the shortest time possible. You’ll have a time limit of 9 months after the end of the year or so 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 need to register on the hmrc website before you fill up the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country where you might have paid vat initially, together with scans of vat invoices that you might have to attach to your application.
Once 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 other clarification or documents are required then you should expect a delay of four more months and hence 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 need to be converted into sterling pounds prior to it being transferred into your UK banking account.
Even though the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds on your behalf and inform you on the status of your applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount back into your business.