Claiming vat back can improve your business income
If you are a vat registered trader in the UK then you would have to pay vat on many goods and services but are you aware that claiming vat back can enhance 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 now utilize 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 a business in Britain then you will need to make an application for vat registration once your last 12 month sales turnover touches ?70,000 check vat number. 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 these goods and services according to the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will allow you to claim vat back on any services or goods purchased for the business. This amount may be recovered even though 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 read full article. 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 is charged for you then it may be claimed back as soon as you fill the required 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 will have a time limit of 9 months following 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 on the hmrc website before you can fill up the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you may have paid vat initially, along with scans of vat invoices that you might need to affix 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 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 to your UK banking account.
Even though the process to reclaim vat back is a little tedious, a competent vat agent can apply for vat refunds as your representative and notify you on the status of your applications. The reality is that claiming vat back can indeed enhance your business income by pumping back that double-taxed amount directly into your business.