Claiming vat back can improve your business income

If you're a vat registered trader in Britain then you would need to pay vat on many services and goods but did you know that claiming vat back can enhance your business cash flow? If you have already paid vat once on any services or goods necessary for your company or paid vat on it even in another eu country then you can definitely make an application for a vat refund.

Most eu countries now utilize the system of vat or value added tax on movement of goods and services as a means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and when you run a business in the UK then you'll need to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company depending on the classification of those products or services as per the HM Revenue and Customs or hmrc vat department.

However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any goods or services purchased for your business. This amount can be recovered even if you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof that includes the vat invoice or vat receipt. If you have imported goods into the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat is charged for you then these can be claimed back after you fill the required vat reclaim form.

You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You'll have a time limit of 9 months after the end of the year or so after you had first paid your vat on those services or goods. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you fill the mandatory online vat form for vat reclaim. The form is then sent to the member eu country where you may have paid vat initially, along with scans of vat invoices that you might have to attach to the application.

Once you get a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are required then you definitely should expect a delay of four more months and hence it is essential to get it right the very first time itself. Your vat refund may be deposited in a bank account which you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need to be changed into sterling pounds before it can be transferred into your UK banking account.

Although the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds on your behalf and notify you on the status of the applications. The reality is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your company.