There are certain conditions that might have compelled you to again pay VAT on goods or services that have already been paid by you and in such cases you should go in for vat recovery for vat already paid on such goods or services. Your vat agent could guide you during this complex process that needs to be followed through if you want vital funds to flow back into your business.
Often, while importing goods into the UK where vat is applicable, from another eu country that also follows the vat tax system, you might end up paying vat in the country of origin. You might also end up paying vat again in the UK on those same goods. Similarly, you or your employees might have to pay vat on services used in another eu country that has adopted vat. However, all is not lost since hmrc or HM Revenue and Customs department in the UK allows you to reclaim that vat amount back, albeit within 4 to 8 months.
If you have utilized capital goods for your business or regularly import goods from eu countries that follow vat such as Sweden, Germany, Poland, Portugal, Spain, etc then paying vat twice can increase your product costs in an adverse manner. Similarly, taking part in trade shows or arranging for food and accommodation for your staff in a foreign eu country can attract local vat of that country and you need to reclaim that vat once your employees return back to the UK. You essentially have 9 months to claim for vat recovery for such vat paid on goods and services in the preceding year.
You will certainly need to carefully preserve each vat invoice or receipt to prove the vat amounts that have already been paid against those goods or services. You will also need to be a vat registered trader in the UK before you can make any vat refund claims. You will first need to register at the hmrc vat website before you can apply for vat recovery or use any of their other vat online services offered by them. You can then file an electronic application for recovery of vat and you might also have to attach all required documents electronically before emailing the same to hmrc. Hmrc will send your application for processing to the country of origin where vat was originally paid so that the eu country can process and refund that vat amount.
If your vat agent has adhered to all requirements for successful vat refund then you can expect the vat amount to be deposited in your bank account within 4 months or might have to wait for as long as 8 months to receive the amount. However, once your vat agent files vat refunds on a regular basis then you can expect regular cash-injections in your bank account, which in turn will surely improve the cash flow of your business. The cost of your goods too will again become competitive since the problem of double taxation will be eliminated with successful vat reclaims.
If you have already paid vat on capital goods, services or on regular import of goods then it is extremely important that you try to recover the vat tax amount that has originally been paid on the same. You should make the necessary efforts and go in for vat recovery for vat already paid on goods or services since successful recovery can certainly improve the bottom-line of your business.