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Claiming vat back can improve your business income


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If you are a vat registered trader in Britain you would then have to pay vat on most goods and services 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 necessary for your business or paid vat on it in another eu country then you can certainly submit 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. Great Britain too has shifted to vat and when you run a business in the UK then you’ll have to apply for vat control vat registration once your last 12 month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales related to your company according to the classification of these 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 produced vat rules that will allow you to 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 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 for you then it may be claimed back as soon as you fill up the necessary vat reclaim form.

You should 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 will have a time frame of 9 months after the end of the year or so once you had first paid your vat on those services or goods. You may 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 will then be 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.

As soon as you receive a confirmation usually within 15 days of receipt of your 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 case any other clarification or documents are needed then you should expect a delay of 4 more months and hence it is vital to have it right the very first time itself. Your vat refund may be deposited in any banking account which you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need 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, a competent vat agent can apply for vat refunds as your representative and inform you about the status of the applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount directly into your business.