Use the vat reclaiming process to receive vat back into your account

Once you turn into a vat registered trader in the UK or in any other vat-enabled eu country then you can reap the benefits offered by vat rules once you use the vat reclaiming process to receive vat back into your account for vat already paid on goods or services. These goods or services, however, have to be used for your business only and they include vat amounts paid in another eu country too.

In these days of tough competition, paying vat twice on goods or services can effectively knock you out of the competition. The fact that paying vat twice affects your cash flow negatively should also be considered and you should certainly opt to fill out the online vat form to apply for reclaiming vat even though that amount might land up in your bank account after 4 to 8 months of filing an application. The vat refunds could certainly be huge if you import goods from another eu country or pay vat on trade shows organized in those countries.

You need not monitor the status of your vat refund application on a daily basis anyway since you can simply empower your vat agent to file and monitor vat reclaims on your behalf. You will first need to get registered with HM Revenue and Customs or hmrc in the UK before you can use any of their vat online services that include vat registration applications, vat returns and vat refunds. You cannot deduct the vat amount from the next vat return for vat paid in foreign countries but instead need to apply for reclaiming vat by providing specific vat invoice details that show the amount that you have already paid even if it is in another eu country such as Greece, Sweden, Poland, Germany, etc.

On its part, hmrc vat will forward your vat reclaiming request to the country mentioned in your application. That country’s vat department might process your vat application within 4 months and proceed to refund you the vat amount in their currency in your bank account, or ask for additional information that might delay your vat reclaim by another 4 months. Your vat agent will be ready to file and follow-up on each vat refund application usually in exchange for a cut in the vat amount that you receive in your bank account, which can be considered fair since you need not pay your vat agent in advance or ignore your business to chase after vat refunds.

However, if you want to claim vat paid on local goods or services that have been used for your business then the process is quite different and you will need to visit the hmrc vat website to find out the exact procedure and amount that can be reclaimed against capital goods or input tax paid on goods or services. Your vat reclaim will also depend on the VAT accounting scheme that you have chosen to follow since some schemes do not allow for vat refunds.

Your business might suffer a double-blow if you end up paying vat twice over the same goods or services. You need the services of an expert and experienced vat agent to guide you through the vat reclaiming process so that your business gets regular vat refunds on vat that has already been paid locally or in a eu country that also follows the system of vat.