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Claiming vat back can enhance your business income


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If you’re a vat registered trader in the UK then you would need to pay vat on most goods and services but are you aware that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services necessary 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 have adopted 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. Great Britain too has shifted to vat and when you operate a business vatverification in Britain then you’ll have to apply for vat registration once your last 12 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 goods and 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 permit you to definitely 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. In case 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 has been charged to you then these can be claimed back as soon as you fill up the required vat reclaim form.

You should hire a proficient vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You’ll have a time limit of 9 months following the end of the year or so once you had first paid your vat on those services or goods. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need 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 where you might have paid vat initially, together with scans of vat invoices which you may need to attach to your application.

As soon as you get a confirmation usually within 15 days of receipt of the 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 needed then you definitely should expect a delay of four more months and hence it is vital to get 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 nation of origin and will need to be changed into sterling pounds before it can be 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.