How does a business claim vat back

hey all,
how does a business claim vat back can it claim the vat back on stuff it buys to sell on for example if it sold bird houses and it needed to buy some wood to make a bird house for a client could it claim the vat back on the wood it bought to do the job
thanks for any help
Gaz
Answer #1
Are you talking about UK VAT?
If so…..
If you are registered for VAT, you can claim the VAT back on anything you purchase/spend for the business (whether supplies, utilities, office equipment, etc) subject that you have a VAT receipt for each.
At the end of each period, you will have to send your VAT returns which shows:
VAT on sales – VAT on purchases = Net VAT payable
It is often the case that in the beginning, you will receive a refund from the VAT office since initial costs are usually higher than the sales.
It is a regular practice for VAT office to send an inspector to check your accounts during the first year. You have to be prepared to produce the necessary VAT invoices for whatever the inspector asks for. There are severe penalties (financial and criminal) for failure to provide proper records.
Let me know if you need more help
Good luck
Answer #2
thanks for that mate yes UK vat
so how do you get the money back from the vat if the wood cost 100 pound that means that the business needs to claim back £16.67 might sound daft but do you get a cheque sent to you for it or somethin but then you have the other side of it if it cost £100 for the wood and it sold the finished product to the customer for £200 how does the vat get paid on that
can you help me out im lost
Answer #3
Everything that you purchase, if it has a VAT receipt (A receipt which has seller’s VAT registration number on it..important), it will either have the VAT amount listed separately or just the gross rate listed.
VAT Calculations:
VAT for 2010 17.5%
VAT from 4th of January 2011, 20%
Net Amount + Net Amount*20%(VAT) = Gross Amount
or
Net Amount x 1.20 = Gross Amount
or
Net Amount = Gross Amount / 1.2
VAT = Gross Amount – Net Amount
Simply:
VAT = Gross Amount x (0.20/1.20)
At the end of each period (usually 3 months), you add up all the VAT that you have paid on your purchases during that period;…and….you add up all the VAT due on your sales during that period and then:
VAT on sales – VAT on purchases = Net VAT payable
Now if the figure is negative…meaning you paid more VAT on your purchases than on the sales, VAT Office will send you a cheque.
If the figure is positive, …meaning you paid less VAT on your purchases than VAT due on your sales,…then you have to send your payment cheque with your VAT returns.
Answer #4
great thanks for that mate i now understand whats going on
THANK YOU for explaining