Claiming vat back can improve your business cash flow

 

If you are a vat registered trader in Britain you would then need to pay vat on many goods and services but did you know that claiming vat back can improve your business cash flow? If you have already paid vat once on any goods or services necessary for your company or paid vat on it in another eu country then you can certainly 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 vatvalidation.com/vat as a means of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you run a company in Britain then you will 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 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 produced vat rules that will allow you to definitely claim vat back on any goods or services purchased for your 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. 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 to you then it may be claimed back after you fill the required 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 will have a time limit of 9 months after the end of the year or so once you had first paid your vat on those goods or services. You can use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register at the hmrc website before you can 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 which you may need to affix to your application.

 

Once you get a confirmation usually within 15 days of receipt of your 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 the event any other clarification or documents are required then you should expect a delay of four more months and hence it is essential to have it right the very first time itself. Your vat refund may be deposited in a banking account which 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 prior to it being transferred to your UK banking account.

Although the process to reclaim vat back is a bit tedious, an efficient vat agent can apply for vat refunds as your representative 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 directly into your company.