GETTING YOUR OWN BACK
Page 40
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Many hauliers give up reclaiming Continental VAT as a bad job. But they could be losing thousands of pounds.
• Up to 60% of transport operators who work on the Continent do not bother to reclaim VAT, according to a recent Shell survey. Industry pundits believe this figure could even be higher with as many as 85% writing off Continental VAT expenditure.
Many do not realise they can reclaim VAT. Others choose to ignore the reclamation system, calling it an administrative nightmare, even though they could be reclaiming thousands of pounds a year.
Operators must first fulfil two simple conditions to claim VAT: they must be registered for VAT in an EC country and can reclaim it only on goods and services subject to VAT. This does not include goods bought for export or goods and services such as entertainment expenses.
MINIMUM AMOUNT
It is important to know the rules for reclaiming VAT are slightly different in each EC country. Each state also sets a minimum amount that can be refunded.
Before you can apply for a VAT refund you need a certificate of your taxable status — a VAT 66 certificate. Operators also need proof of all the VAT that has been paid. Invoices and receipts must show the following information: El An indentifying number 0 The supplier's name address and VAT registration number 0 Your name and address 0 Details of goods and services supplied 0 The date of supply 0 The cost of the goods and services, excluding VAT 0 The VAT rate 0 The amount of VAT charged All receipts submitted for VAT refunds must be original and not photocopies. Once you have a VAT 66 certificate and proof of VAT paid all you need is a VAT reclamation form, which is available only from the tax authority in the country where VAT was paid. In other words, if you are reclaiming VAT in France you need a form from the Paris-based tax authority.
The form is available in all official languages of the EC. But it must be filled in the language of the country where VAT was paid. Not surprisingly, this is where many operators come unstuck. Once confronted with a foreign VAT reclamation form, they give up hope of ever getting a VAT refund. Some of those that persevere turn to language firms to fill in the forms, others use outside agencies to handle the entire claim.
It is important to remember that each EC country has different rules about using agents. Normally an agent will need either power of attorney or a letter of authority before it can act for you.
The Freight Transport Association, which runs a VAT reclamation service, says that agencies can ease the process of VAT refunds from start to finish.
John Hix, executive for international transport and Customs, says the FTA can give operators all the relevant documents as well as practical advice. "For example, the Italians are currently working on a threeto four-year backlog." says 1-lix.
CHASING CLAIMS
The FIA charges 10% of the money reclaimed for this service, and this includes chasing up claims. It can take up to a year for refunds to arrive.
They are usually made by credit transfer in the currency of the country making the refund. Operators may have to pay bank charges on the transfer and this may be deducted from the amount refunded. Again, the rules of payment vary between EC countries. In Italy, for example, payment will be made only in lire to an account in your name at an Italian bank or post office.
Some non-EC countries also allow UK firms to claim VAT refunds. For advice on reclaiming VAT contact: HM Customs and Excise, VAT Control Division C (Branch 2), St John's House, Merton Road, Liverpool L20 3NN, Tel 051-922 6393.
HM Customs and Excise publishes a booklet, Notice 723, covering VAT refunds for Continental traders. 0 by Tanya Cordrey