Claiming vat back can improve your business cash flow

If you are a vat registered trader in the UK you would then need to pay vat on many goods and services but did you know that claiming vat back can improve your business cash flow? 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 make 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 moved to vat and when you operate vat verification a business in the UK then you will have 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 business depending on the classification of these products or services as per the HM Revenue and Customs or hmrc vat department.

However, in order to avoid double taxation on such goods and services, the hmrc department has produced vat rules that will allow you to definitely claim vat back on any goods or services purchased for your 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 nation of origin or have attended a trade fair in a foreign eu country where vat has been charged for you then it may be claimed back after you fill up the necessary vat reclaim form.

You should 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 following the end of the calendar year 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 have to register on the hmrc website before you fill the mandatory online vat form for vat reclaim. The form is then forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices that you might have to affix to your application.

Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are required then you should expect a delay of 4 more months and hence it is essential to get it right the 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 nation of origin and will need to be changed into sterling pounds prior to it being transferred into your UK banking account.

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