Claiming vat back can enhance your business income

If you’re a vat registered trader in the UK you would then have to pay vat on most goods and services but did you know that claiming vat back can improve your business income? If you have already paid vat once on any services or goods required for your business or paid vat on it even in another eu country then you can definitely make an application for a vat refund.

Most eu countries have adopted 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 if you operate a business in Britain then you will need to apply for vat registration once 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 related to your company 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 established vat rules that will allow you to definitely 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 are able to show documentary proof which includes the vat invoice or vat receipt. In case 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 for you then it may be claimed back after you fill up the necessary vat reclaim form.

You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so that your vat refund claim is passed in 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 have to register at the hmrc website before you fill up the required online vat form for vat reclaim. The form will then be forwarded to the member eu country where you might have paid vat initially, along with scans of vat invoices which you may need to attach to the application.

As soon as you receive 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 the event any additional clarification or documents are required then you definitely should expect a delay of four more months and therefore it is vital to have it right the very first time itself. Your vat refund may be deposited in any bank 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 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 as your representative and inform you on the status of your 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.