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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 need to pay vat on most goods and services but are you aware that claiming vat back can improve your business income? 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 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 http://vatvalidation.com/vat as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you operate a business in the UK then you will have to apply for vat registration once your last Twelve month sales turnover touches ?70,000. Being a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your business depending on 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 produced vat rules that will permit you to claim vat back on any goods or services 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 are able to 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 country of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then these can be claimed back as soon as 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 frame of 9 months after the end of the year or so after you had first paid your vat on those goods or services. You may 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 is then forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to affix to your application.

As soon as 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 vital to have it right the very first time itself. Your vat refund may be deposited in any bank account that you specify within or outside the UK. However, this amount will be in the currency of the country of origin and will have 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 your applications. The fact is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount back into your business.