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 most services and goods but did you know that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods necessary for your business or paid vat on it even in another eu country then you can definitely submit an application for a vat refund.

Most eu countries have adopted the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and when you run a company in Britain then you’ll need to make an application for vat registration when your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales related to your business according to the classification of those products or services according to 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 established vat rules that will permit you to definitely claim vat back on any services or goods purchased for the business. This amount can be recovered even though you have paid that vat in another eu country that follows vat, provided you can show documentary proof which includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then it may be claimed back as soon as you fill the necessary vat reclaim form.

You should hire an excellent vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed within the shortest time possible. You’ll have a time frame of 9 months following the end of the calendar year once you had first paid your vat on those services or goods. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to affix to the application.

As soon as you get a confirmation usually within 15 days of receipt of your 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 the event any additional clarification or documents are required then you should expect a delay of four more months and hence it is vital to get it right the first time itself. Your vat refund can be deposited in any bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will have to be converted into sterling pounds before it can be transferred to your UK banking account.

Although the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and notify you about the status of your applications. The fact is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your company.