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 most 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 goods or services necessary for your company 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 goods and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you run a company in Britain then you will need to apply 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 those goods and services as per 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 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 into 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 as soon as you fill up the required vat reclaim form.
You should hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You will have a time frame of 9 months following the end of the year or so once you had first paid your vat on those goods or services. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at 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 where you may have paid vat initially, along with scans of vat invoices that you might have to attach to the application.
As soon as you receive a confirmation usually within 15 days of receipt of your 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 case any other clarification or documents are needed then you 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 bank account that 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 changed into sterling pounds before it can be transferred into your UK banking account.
Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and notify you about the status of the applications. The reality is that claiming vat back can certainly enhance your business cash flow by pumping back that double-taxed amount back into your business.
