If you’re a trader in the UK with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. Once your taxable sales touch the vat threshold limit of ?70,000 during the past Twelve months then you’ll need to get vat registration so that you too can end up part of this tax system that’s in force in the majority of Europe.
If you’re a really small trader that mostly sells retail goods you’ll be able to remain out of the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or if you sell goods to vat registered traders then you would be better off as a vat registered trader in the UK. Vat has been employed as a way of collecting taxes on products or services in the majority of of Europe as well as the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk www.vatcontrol.com then you will need to apply for vat registration. That can be done even before you reach this limit if you feel that you need to reclaim vat that has previously been paid on goods and services, especially in a different eu country where this method is followed. You ought to do the hiring of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there are no problems in claiming back vat.
As soon as you do turn into a vat registered trader in the UK, which could extend to 30 days once you file a web-based vat application then you will need to charge vat as per the 14,000 goods and services classifications given by the hmrc vat department. This will have to be done through each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates beginning with the standard rate of 17.5%, reduced vat rate of 5%, as well as the zero vat rate. Certain services and goods are totally vat exempt too.
As soon as you are a vat registered trader so as to pay and collect uk vat determined by vat invoices then you will also need to file your vat returns regularly. Again, your vat agent is going to be necessary to calculate vat to get paid or refunded depending on your vat purchases and sales. In case you have imported services or goods in the UK after paying vat in a eu country then you can avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to eight months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to avoid double taxation as well as plug many loopholes which were present in the conventional sales tax system.
If you’re a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you need to keep the cycle of vat alive by getting to be a vat registered trader. You can now collect and pay uk vat whilst claiming any vat previously paid on imported products or services, which will will reduce your tax overheads to some large extent.