Claiming vat back can enhance your business income

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 income? If you have already paid vat once on any services or goods necessary for your company or paid vat on it in another eu country then you can definitely submit 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 when you operate a company in the UK then you will have to apply for vat registration when your last Twelve 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 company according to the vatcontrol.com 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 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 are able to show documentary proof which 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 has been charged to you then these can be claimed back after 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 within the shortest time possible. You will 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 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 can fill up the mandatory online vat form for vat reclaim. The form will then be forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices which you may need to attach to the application.

Once you receive a confirmation usually within 15 days of receipt of the 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 the event any additional clarification or documents are required then you should expect a delay of 4 more months and hence it is vital to get it right the first time itself. Your vat refund can 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 have to be changed into sterling pounds prior to it being 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 notify you about the status of your applications. The reality is that claiming vat back can certainly improve your business cash flow by pumping back that double-taxed amount back into your company.