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. When you finally are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business cash flow.
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 countries. If you have started a fresh business in the UK and have touched ?70,000 pounds in taxable sales during the past vat registration number 12 months then you can definitely make an application for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before this 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, once you apply for vat registration then your costs could increase slightly, and when you sell your products or services locally in the UK 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 business activities simply to remain outside the system of vat then the hmrc vat department might not take your actions lightly in case you are discovered doing precisely the same. There are several advantages of entering the vat system as it will avoid 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 quite simple however, if you are not sure about yourself then you definitely should simply appoint an expert vat agent to handle 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 choice. As soon as you apply for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, during that period you will need to take into account applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
Once your application is eligible you will receive your unique vat registration number and will need to display it on all vat documents including 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 top. You will need to provide a summary of all vat paid and collected within 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 certainly try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a straightforward online procedure that needs to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the web based vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.