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Claiming vat back can enhance your business cash flow


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If you’re a vat registered trader in the UK then you would have to pay vat on many goods and services but are you aware that claiming vat back can enhance your business income? In case you have already paid vat once on any goods or services required for your company or paid vat on it in another eu country then you can definitely submit 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 as a means of collecting more revenue and plugging tax leaks. Great Britain too has shifted to vat and if you operate a business in Britain then you’ll have to apply for vat registration when your last 12 month sales turnover touches ?70,000 www.checkvatnumber.com. As a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your business according to the classification of those products or services as per the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such services and goods, the hmrc department has established vat rules that will permit you to definitely claim vat back on any services or goods purchased for your business. This amount can 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 get the facts. In case you have imported goods into the UK after paying vat in the nation 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 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 that your vat refund claim is passed in the shortest time possible. You’ll have a time frame of 9 months after the end of the year or so once you had first paid your vat on those goods or services. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you can fill up 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, together with scans of vat invoices which you may have to affix to your application.

Once you get 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 additional clarification or documents are needed then you definitely should expect a delay of 4 more months and therefore it is essential to get it right the very first time itself. Your vat refund may be deposited in any 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 converted into sterling pounds before it can be transferred to your UK banking account.

Even though the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds on your behalf and inform you about the status of your applications. The fact is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount directly into your business.