Claiming vat back can improve your business income
If you are a vat registered trader in the UK then you would need to pay vat on many goods and services but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services required 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 have adopted 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 will need to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. 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 these goods and services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent 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 goods or services purchased for your 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 that includes the vat invoice or vat receipt. If you have imported goods into 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 should hire an excellent vat agent with complete understanding 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 limit of 9 months after the end of the calendar year after you had first paid your vat on those services or goods. You may 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 sent to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may have to attach to the application.
Once you get a confirmation usually within 15 days of receipt of the 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 definitely 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 banking account that you specify within or outside Britain. 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 banking account.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and inform you about the status of your applications. The fact is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your business.