Claiming vat back can improve your business income

If you are a vat registered trader in Britain you would then have to pay vat on most goods and services but are you aware that claiming vat back can improve your business income? 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 certainly 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 means of collecting more revenue and plugging tax leaks. The UK too has moved to vat and if you operate a business in the UK then you will need to apply 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 according to the classification of those 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 goods or services purchased for your business. This amount can be recovered even if 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 to the UK after paying vat in the nation of origin or have attended a trade fair inside a foreign eu country where vat has been charged for you then these can be claimed back as soon as you fill up 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 frame of 9 months following the end of the year or so after you had first paid your vat on those goods or services. 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 can fill up the required online vat form for vat reclaim. The form is then sent to the member eu country where you may have paid vat initially, together with scans of vat invoices which you may have to attach to your application.

As soon as you receive a confirmation usually within 15 days of receipt of your refund claim, it will take 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 needed then you should expect a delay of 4 more months and therefore it is essential to get it right the very first time itself. Your vat refund can 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 need to be converted into sterling pounds prior to it being transferred into your UK bank account.

Even though the process to reclaim vat back is a little tedious, an efficient vat agent can apply for vat refunds on your behalf and notify you about the status of the applications. The reality is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount back into your business.