Claiming vat back can enhance your business cash flow

If you are a vat registered trader in Britain you would then have to pay vat on many goods and services but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods required for your company or paid vat on it even in another eu country then you can certainly submit an application for a vat refund.

Most eu countries now utilize the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you run vat verification a company in Britain then you will have to apply for vat registration once your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will have to pay and collect vat on all purchases and sales related to your business according to the classification of those goods and services as per the HM Revenue and Customs or hmrc vat department.

However, to prevent double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any services or goods purchased for the business. This amount can be recovered even if 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 country 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 after you fill up 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 in the shortest time possible. You’ll have a time frame of 9 months following the end of the calendar year once you had first paid your vat on those services or goods. You may use several online vat services offered 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 sent to the member eu country in which 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 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 required then you definitely should expect a delay of four more months and hence it is essential to get it right the very first time itself. Your vat refund may be deposited in any bank account that 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 before it can be transferred into 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 inform you about the status of the applications. The fact is that claiming vat back can certainly improve your business income by pumping back that double-taxed amount back into your business.