Claiming vat back can improve your business cash flow

If you're a vat registered trader in Britain then you would need to pay vat on many goods and services but did you know that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any services or goods necessary for your company or paid vat on it even 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 www.vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and if you run a company in the UK then you will need to make an application for vat registration once your last Twelve month sales turnover touches ?70,000. As 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 according to the HM Revenue and Customs or hmrc vat department.

However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to 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 are able to show documentary proof that includes the vat invoice or vat receipt. If you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair inside a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill up the necessary vat reclaim form.

You need to hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so 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 calendar year 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 need to register at the hmrc website before you fill up the required online vat form for vat reclaim. The form will then be forwarded to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may have to attach to your application.

Once 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 case any additional clarification or documents are required then you should expect a delay of 4 more months and hence it is vital to have it right the first time itself. Your vat refund can be deposited in a bank account that you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need to be converted into sterling pounds prior to it being transferred to your UK bank account.

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