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Claiming vat back can enhance your business cash flow


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If you are a vat registered trader in the UK then you would need to pay vat on many goods and services but did you know that claiming vat back can enhance your business cash flow? If 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 certainly 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 means of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you operate a company in the UK then you will have to make an application for vat registration when your last Twelve month sales turnover touches ?70,000 check vat number. 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 classification of these products or services as per 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 though 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 article source. If you have imported goods into the UK after paying vat in the country of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then these can be claimed back as soon as you fill the necessary 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 within the shortest time possible. You’ll have a time frame of 9 months after 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 at the hmrc website before you fill the required online vat form for vat reclaim. The form will then be sent to the member eu country where you might have paid vat initially, along with scans of vat invoices that you might have to affix to your application.

Once 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 case any additional clarification or documents are required then you definitely should expect a delay of 4 more months and therefore it is vital to have it right the very first time itself. Your vat refund can be deposited in a bank account which 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.

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 on the status of the applications. The reality is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount directly into your business.