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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 many services and goods but did you know 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 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 run a company in Britain then you’ll have to apply 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 related to your company depending on the classification of those goods and services according to the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will allow you to definitely claim vat back on any services or goods purchased for your business. This amount may be recovered even if 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. In case you have imported goods to the UK after paying vat in the country of origin or have attended a trade fair in a foreign eu country where vat is charged for you then it may be claimed back as soon as you fill the required vat reclaim form.

You should hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You’ll 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 offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you fill the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices that you might have to attach to your application.

As soon as you receive 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 case any additional clarification or documents are needed then you definitely should expect a delay of four more months and therefore it is vital to get it right the first time itself. Your vat refund can be deposited in any bank 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 prior to it being transferred into your UK banking account.

Even though the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds as your representative and notify you on the status of your applications. The reality is that claiming vat back can indeed enhance your business cash flow by pumping back that double-taxed amount directly into your company.