Claiming vat back can improve your business cash flow

If you are a vat registered trader in Britain then you would have to pay vat on most services and goods but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods required for your company or paid vat on it in another eu country then you can certainly 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 way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you operate vatverification a business in the UK then you will need to apply for vat registration once 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 business depending on the classification of those goods and services as per the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such goods and services, 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 may 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 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 for you then these can be claimed back as soon as you fill up the required vat reclaim form.

You need to hire a proficient 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 after the end of the calendar year after you had first paid your vat on those goods or services. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill up the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices that you might 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 other clarification or documents are required then you definitely should expect a delay of four more months and therefore it is vital to have it right the very 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 country of origin and will have to be changed into sterling pounds before it can be transferred into your UK bank account.

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