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Claiming vat back can enhance your business income


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If you’re a vat registered trader in Britain you would then need to pay vat on most 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 required for your company or paid vat on it even in another eu country then you can definitely make 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. Great Britain too has shifted to vat and if you operate a company in Britain then you’ll need to make an application for vat registration when 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 depending on the vatcontrol.com classification of those goods and services as per the HM Revenue and Customs or hmrc vat department.

However, in order to avoid double taxation on such goods and services, the hmrc department has produced vat rules that will allow you to claim vat back on any goods or services purchased for your business. This amount can 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 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 up the necessary vat reclaim form.

You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You’ll have a time frame of 9 months following the end of the year or so after you had first paid your vat on those services or goods. You can use several online vat services provided by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you fill up 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, along with scans of vat invoices that you might need to affix to the application.

As soon as you get 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 case any other clarification or documents are needed then you definitely 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 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 into your UK banking account.

Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds as your representative and inform you on the status of your 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.