If you have already paid VAT in a foreign eu country and have to pay for the same again in your own country then you can reclaim vat to reduce the burden of double taxation. The entire procedure can be completed online, especially if your vat registered business is situated in the UK where the HM revenue and customs or hmrc department offers several vat online services including the vat refund scheme that makes reclaiming vat an easy process.
If you have purchased goods from another vat enabled country in the European Union such as Spain, Sweden, Hungary, Poland, Italy, Germany, etc where you do not have a vat registered business and have already paid vat in the country of origin then you can and should claim that vat back. This will not only reduce your product cost but also allow for vital funds to flow back into your business. Even though the vat reclaiming process usually takes between 4 to 8 months to complete, you can simply appoint a vat agent that is an expert in eu vat and uk vat refund rules. This will help you to concentrate on your business while your agent tries to reclaim vat on your behalf by using the online vat refund scheme.
Before you can post your first claim for vat, you will need to be a vat registered trader in the UK and will also need to register for vat refund with the hmrc. You will have a maximum of 9 months after the end of a calendar year to make your vat refund application. Since you can simply fill out the online vat form to reclaim any previously paid vat, you will not have to fill out and dispatch any paperwork but might need to attach scanned copies of vat paid invoices for claims over a stipulated amount. Some countries might also insist on looking at original invoices that you might need to dispatch in order to get a successful refund. Again, your vat agent can help you to complete all necessary formalities.
Many eu countries have their own version of a vat invoice and have different vat rates for various goods and services. For example, Poland requires its vat registered traders to issue a faktura invoice or vat invoice. However, most eu countries do offer some form of vat refunds to avoid the problem of double taxation on goods and services. You cannot deduct the vat refund amount in your routine vat returns but will instead have to use the vat refund scheme for the same. If you have made a vat reclaim in a eu country then you will usually receive the refund amount in their currency. You can either transfer the refund amount to an account in that country or directly arrange for the money to be received in your UK bank account by providing them the necessary details including your bank account number.
If you constantly need to import goods or services into the UK where vat has already been paid then you should register for the vat refund scheme offered by the hmrc vat department. Once you successfully reclaim vat then you can accurately price your products and services while receiving a much needed financial injection in your business.