Claiming vat back can enhance your business cash flow

If you’re a vat registered trader in Britain you would then need to pay vat on most services and goods but are you aware that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any goods or services required for your business 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 goods and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you run a company in the UK then you’ll need to apply for vat registration once your last 12 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 company depending on the www.vatcontrol.com classification of these 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 claim vat back on any goods or services 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 are able to 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 inside a foreign eu country where vat is 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 understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You will have a time limit of 9 months after the end of the calendar year once you had first paid your vat on those services or goods. You can 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 sent to the member eu country where you might have paid vat initially, together with scans of vat invoices which you may have to attach to the application.

As soon as you receive 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 required then you definitely should expect a delay of four more months and therefore it is vital to have it right the very first time itself. Your vat refund can be deposited in any bank account that you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be converted into sterling pounds before it can be transferred to your UK bank 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 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 directly into your company.