Claiming vat back can improve your business cash flow

If you are a vat registered trader in Britain then you would need to pay vat on many services and goods but are you aware that claiming vat back can improve your business cash flow? In case you have already paid vat once on any services or goods 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 goods and services as a means of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you operate a business vatverification in the UK then you'll need to apply 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 classification of those 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 services or goods purchased for the 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 that includes the vat invoice or vat receipt. In case 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 is charged to you then these can be claimed back as soon as you fill 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 in 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. You may use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you can fill up 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 that you might have to affix to the application.

As soon as you get a confirmation usually within 15 days of receipt of your refund claim, it will take 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 needed then you definitely should expect a delay of four more months and hence it is essential to get it right the first time itself. Your vat refund may 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 before it can be transferred to your UK bank account.

Although the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and inform you about 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 directly into your company.