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Claiming vat back can enhance your business cash flow


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If you’re a vat registered trader in the UK then you would need to pay vat on many goods and services but are you aware that claiming vat back can enhance your business income? If you have already paid vat once on any goods or services necessary for your company or paid vat on it even in another eu country then you can certainly 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 shifted to vat and when you run a business in the UK then you will have to apply for vat registration when your last 12 month sales turnover touches ?70,000. Being 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 those goods and services according to the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such services and goods, the hmrc department has established vat rules that will allow you to definitely claim vat back on any goods or services purchased for your business http://vatcontrol.com/vat. 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 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 for you then these can be claimed back after you fill the necessary vat reclaim form.

You need to hire an excellent 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 source. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you can fill the mandatory 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 that you might have to attach to the application.

Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will require 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 four more months and hence it is essential to get it right the first time itself. Your vat refund may be deposited in a bank 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 converted into sterling pounds before it can be transferred to your UK banking account.

Even though 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 your applications. The fact is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount directly into your business.