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Recoverable VAT in European Member States
UK businesses that have incurred recoverable VAT in another EU member state have until the end of September to submit their claims. Taxand UK explores the VAT process and impact on British based companies.
If a business is VAT registered and incurred VAT of more than EUR50 or the equivalent during 2011 in another EU member state, they should consider whether a claim is feasible.
UK businesses must now submit their claims electronically to HMRC who pass the information to the relevant EU tax authority. The electronic process adopted in 2010 has made overseas VAT claims more efficient and less costly than the original paper-based system which required businesses to apply directly to the relevant tax authority.
Companies may find that claiming relatively small amounts of overseas VAT is now more practical than it was previously.
In the current economy, any type of tax breaks are good for business. Making the process electronic and therefore easier to claim back VAT will encourage UK businesses to start the process. Although it could be viewed as 'more work' that the Refund Scheme differs from a normal VAT Return; having two ways in which VAT can be claimed means that in the long run less time is spent on claiming VAT back, as it is clear what the company is applying for.
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