Claiming vat back can enhance your business cash flow

If you are a vat registered trader in Britain you would then need to pay vat on many services and goods but are you aware that claiming vat back can improve your business cash flow? In case 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 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 way of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and when you run a company in the UK then you will have to apply for vat registration when your last 12 month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales in connection with your company according to the vat control classification of these products or services according to 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 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. 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 to you then it may be claimed back as soon as you fill up 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 within the shortest time possible. You will have a time frame of 9 months after the end of the calendar year 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 need to register at the hmrc website before you fill the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices that you might have to attach to your application.

As soon as you get 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 case any additional clarification or documents are needed then you definitely should expect a delay of four more months and hence it is essential to have it right the first time itself. Your vat refund can be deposited in any bank account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be changed into sterling pounds before it can be 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 on your behalf and notify you about the status of the applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your company.