In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you will need to make an application 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 improve your business earnings.
Several eu countries including 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. In case you have started a fresh business in the UK and also have touched ?70,000 pounds in taxable sales in the past 1 year then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you apply for vat registration your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at a retail level then you may choose 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 only to remain outside the system of vat then the hmrc vat department might not take your actions lightly if you’re discovered doing the same. There are many benefits of entering the vat system since it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods overseas too.
The entire process for registration for vat is quite simple however, if you aren’t sure about yourself then you definitely should simply appoint an expert vat agent to deal with all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to 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 process of approving your application usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will need 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.
As soon as your application is eligible you will receive your unique vat registration number and can have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably need to issue a vat invoice that separately shows all vat rates applied in that invoice along with your vat no at the top. You will need to provide a summary of all vat paid and collected within your vat returns that will have to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on products or services in another eu country then you can certainly apply for vat reclaim once you are an official vat registered trader.
Vat registration is a simple online procedure that has to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill the online vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.