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Claiming vat back can improve your business cash flow

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If you are a vat registered trader in the UK then you would have to pay vat on many services and goods but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any services or goods required 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 products and services vatvalidation.com/vat 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 the UK then you’ll need 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 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 claim vat back on any services or goods purchased for your 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. In case you have imported goods into the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged to you then it may be claimed back as soon as you fill the necessary vat reclaim form.

You need to hire an excellent 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 year or so 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 fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices that you might need to attach to the application.

As soon as you receive a confirmation usually within 15 days of receipt of your refund claim, it will take around 4 months for the claim to be approved from that member country before you can get your vat back. In case any other clarification or documents are required then you 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 a 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 changed into sterling pounds prior to it being transferred to 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 the applications. The reality is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your business.