In case you have crossed the threshold limit or want to become a part of the vat or value added tax system then you’ll need to apply for registration for vat to turn into a vat registered trader. Once you turn into 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 enhance your business earnings.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed whilst trading between member eu www.vatvalidation.com countries. If you have started a fresh business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely make an application for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration your costs could increase slightly, and if you sell your products or services locally in the United Kingdom at the retail level then you could 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 away from system of vat then the hmrc vat department might not take your actions lightly if you’re discovered doing the same. There are several advantages of entering the vat system since it will prevents the problem of double taxation by permitting you to definitely reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is pretty simple but if you aren’t sure about yourself then you should simply appoint a professional vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply 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 procedure for 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 need to factor in applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from their end.
As soon as your application is eligible then you will receive your distinct vat registration number and will 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 that invoice together with your vat no at the very top. You will need to give a breakdown of all vat paid and collected within your vat returns that will need to be filed periodically as required by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can try for vat reclaim once you are an official vat registered trader.
Vat registration is a straightforward online procedure that has to be done first if you want 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 your hmrc vat department when you apply for registration for vat.