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Claiming vat back can enhance your business cash flow


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If you are a vat registered trader in Britain you would then have to pay vat on many services and goods but did you know that claiming vat back can improve your business cash flow? In case you have already paid vat once on any goods or services necessary for your business or paid vat on it in another eu country then you can certainly 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. The UK too has shifted to vat and when you operate a company in the UK then you’ll need to make an application for vat registration once your last 12 month sales turnover touches ?70,000. As 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, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will permit you to definitely claim vat back on any goods or services purchased for the business vatcontrol.com/vat. 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. If 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 is charged to you then it may be claimed back after you fill up the necessary vat reclaim form.

You need to 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’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 goods or services look at this. 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 fill the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you may 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 the 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 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 have it right the very first time itself. Your vat refund can be deposited in any banking account that you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds before it can be transferred to your UK bank account.

Although the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and notify you about the status of your applications. The reality is that claiming vat back can certainly improve your business income by pumping back that double-taxed amount back into your company.