Claiming vat back can enhance your business cash flow

If you are a vat registered trader in Britain then you would have to pay vat on many goods and services but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can definitely submit 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. The UK too has shifted to vat and if you operate a company in Britain then you’ll need to apply for vat registration when your last 12 month sales turnover touches ?70,000 http://checkvatnumber.com. As a vat registered trader you will have to pay and collect vat on all purchases and sales related to your business depending on 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 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 that includes the vat invoice or vat receipt read full article. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill the necessary vat reclaim form.

You need to hire an excellent vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time limit of 9 months after 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 need to register on the hmrc website before you can fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you may have paid vat initially, along with scans of vat invoices that you might need to affix to your application.

Once you get 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 four more months and hence it is essential to have it right the first time itself. Your vat refund may be deposited in any banking account that you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will have to be converted into sterling pounds before it can be transferred into your UK bank account.

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