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 many goods and services but are you aware that claiming vat back can improve your business income? In case 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 submit 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 http://vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a company 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 need 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, 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 goods or services purchased for the business. This amount may be recovered even though 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 has been charged for you then these can be claimed back as soon as you fill up the necessary vat reclaim form.

You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You will have a time frame of 9 months following the end of the calendar year after 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 mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices which you may have to affix to your application.

Once you get a confirmation usually within 15 days of receipt of the 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 required 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 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 banking account.

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