If you have crossed the threshold limit or want to become a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed whilst trading between member eu countries. If you have started a fresh business www.vatnumbers.com in the United Kingdom and have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely apply for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be done as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration then your costs could increase slightly, and when you sell your goods and services locally in the United Kingdom at a retail level then you may opt to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities only to remain outside the system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several benefits of entering the vat system as it will prevents the problem of double taxation by allowing you to reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is quite simple but if you aren’t sure about yourself then you definitely should simply appoint a professional vat agent to deal with all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can make an application for vat using your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then this process of approving the application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, in that period you will have to take into account applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from other end.
Once your application is approved you will receive your distinct vat registration number and may need to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably have to issue a vat invoice that separately shows all vat rates applied in the invoice along with your vat no at the very top. You will need to provide a breakdown of all vat paid and collected in your vat returns which will need to be filed periodically as required by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can apply for vat reclaim once you are an official vat registered trader.
Vat registration is a straightforward online process that needs to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill up the web based vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.