Claiming vat back can improve your business income
If you are a vat registered trader in the UK then you would need to pay vat on most 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 goods or services necessary for your business or paid vat on it in another eu country then you can certainly make an application for a vat refund.
Most eu countries now utilize 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 moved to vat and when you run a company in the UK then you will have to make an application 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 depending on the classification of these products or services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such goods and services, the hmrc department has established vat rules that will permit you to claim vat back on any goods or services purchased for the business vatcontrol.com/vat. This amount can 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 country of origin or have attended a trade fair inside a foreign eu country where vat has been charged to you then it may be claimed back after you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete knowledge of uk vat and eu vat rules so your vat refund claim is passed within the shortest time possible. You’ll have a time limit of 9 months after the end of the year or so once you had first paid your vat on those services or goods find here. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you can fill up the required online vat form for vat reclaim. The form is then forwarded to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may need to attach to your application.
As soon as you get a confirmation usually within 15 days of receipt of your 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 the event any additional clarification or documents are required then you definitely should expect a delay of 4 more months and hence it is vital to get it right the very first time itself. Your vat refund can be deposited in any banking account which you specify within or outside Britain. However, this amount will be in the currency of the nation of origin and will need 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 bit tedious, an efficient vat agent can apply for vat refunds on your behalf and notify you about the status of your applications. The reality is that claiming vat back can indeed improve your business cash flow by pumping back that double-taxed amount back into your company.