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Claiming vat back can enhance your business income


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If you’re a vat registered trader in Britain then you would have to pay vat on most goods and services but did you know that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services required for your business or paid vat on it even 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. The UK too has shifted to vat and when you run a business in Britain then you’ll need to apply for vat registration when your last 12 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 according to the classification of these products or services according to 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 produced vat rules that will allow you to definitely claim vat back on any goods or services 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 can show documentary proof which 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 the required 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 limit of 9 months following the end of the calendar year 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 need to register at the hmrc website before you fill the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices that you might need to attach to the application.

Once you get a confirmation usually within 15 days of receipt of the refund claim, it will take around 4 months for your claim to be approved from that member country before you can get your vat back. In the event any other clarification or documents are needed then you definitely should expect a delay of 4 more months and hence it is essential to get it right the very first time itself. Your vat refund may be deposited in a bank account which you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds before it can be transferred into your UK banking account.

Although 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 about the status of the applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount directly into your business.