Claiming vat back can improve your business income

If you are a vat registered trader in Britain then you would need to pay vat on most services and goods but are you aware that claiming vat back can improve your business cash flow? In case you have already paid vat once on any goods or services required for your business 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 products and services as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and if you run a business in the UK then you’ll have to make an application for vatcontrol vat registration when your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your business according to the classification of these products or services as per the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such services and goods, the hmrc department has produced vat rules that will allow you to 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 that includes the vat invoice or vat receipt. If you have imported goods to 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 to you then it may be claimed back as soon as you fill up the necessary vat reclaim form.

You should hire an excellent 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 frame of 9 months after the end of the year or so after you had first paid your vat on those goods or services. You may 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 fill the mandatory online vat form for vat reclaim. The form will then be sent to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to attach to the application.

Once you receive a confirmation usually within 15 days of receipt of your refund claim, it will require around 4 months for the claim to be approved from that member country before you can get your vat back. In the event any other clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is vital to get it right the first time itself. Your vat refund may be deposited in any bank account that you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds prior to it being transferred to your UK bank account.

Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and inform you on the status of your applications. The fact is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount back into your business.