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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 need to pay vat on most services and goods but did you know that claiming vat back can enhance your business cash flow? If 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 certainly submit an application for a vat refund.

Most eu countries now utilize the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and if you run a company in Britain then you will need to make an application for vat registration when 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 business according to the http://vatcontrol.com classification of those goods and 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 produced vat rules that will allow you to definitely 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 can show documentary proof that includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged for you then these can be claimed back after you fill up the required vat reclaim form.

You should hire a proficient vat agent with complete knowledge 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 limit of 9 months after the end of the year or so once 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 need to register at the hmrc website before you fill the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you may have paid vat initially, along with scans of vat invoices which you may need to attach to your application.

As soon as you get 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 additional clarification or documents are needed then you definitely should expect a delay of 4 more months and hence it is vital to get 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 have to be changed into sterling pounds prior to it being transferred into your UK bank account.

Although the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds as your representative and inform you on the status of the applications. The reality is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount directly into your business.