Claiming vat back can enhance your business income
If you’re a vat registered trader in the UK you would then have to pay vat on many goods and services but are you aware that claiming vat back can improve your business income? 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 definitely 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 means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and when you operate a company in Britain then you’ll have to make an application for vat registration once 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 company depending on the classification of those products or services as per 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 allow you to claim vat back on any services or goods purchased for your business. This amount can 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. 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 up the necessary vat reclaim form.
You need to hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time limit 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 provided 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 is then forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices that you might need to affix to your application.
As soon as 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 other clarification or documents are needed then you should expect a delay of four more months and hence it is essential to have it right the first time itself. Your vat refund can be deposited in a bank 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 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 your applications. The reality is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your business.