Claiming vat back can improve your business cash flow

If you’re a vat registered trader in the UK then you would have to pay vat on most goods and services but are you aware that claiming vat back can enhance your business income? In case you have already paid vat once on any services or goods required for your business or paid vat on it in another eu country then you can definitely make an application for a vat refund.

Most eu countries now utilize the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you run a company vatverification in the UK then you’ll 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 in connection with your business according to 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 established vat rules that will permit you to definitely 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 can 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 in 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 an excellent vat agent with complete understanding 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 following 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 offered by hmrc vat including filing online claims for vat refunds. You will need to register on the hmrc website before you fill the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you might have paid vat initially, along with scans of vat invoices that you might need to attach to the application.

Once you receive 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 the UK. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds prior to it being transferred into 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 notify you on the status of the applications. The reality is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount directly into your business.