If you’re a trader in the UK with rising taxable sales then you need to pay uk vat to enjoy all benefits provided by this taxation system Http://vatcheck.com. As soon as your taxable sales touch the vat threshold limit of ?70,000 during the past 12 months then you’ll need to get vat registration in order that you can also end up part of this tax system that’s in effect in the majority of Europe.
If you are a very small trader that mostly sells retail goods then you can remain from the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in Twelve months. However, if your sales touch that figure or if you sell goods to vat registered traders then you would be better off being a vat registered trader in the UK. Vat has been employed as a way of collecting taxes on goods and services in most of Europe and 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 VAT then you will have to apply for vat registration. You can do so even before you reach this limit if you feel that you need to reclaim vat which has already been paid on goods and services, specifically in a foreign eu country where this system is followed. You ought to do the hiring of an experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds so 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 after you file a web-based vat application then you will need to charge vat according to the 14,000 goods and services classifications given by the hmrc vat department. This will have to be done through each vat invoice you will be required to issue during each taxable sale. UK has 3 vat rates beginning with the regular 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 turn into 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 on a regular basis. Again, your vat agent will be required to calculate vat to get paid or refunded based on your vat purchases and sales. If you have imported goods or services in the UK after paying vat within a eu country then you can avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to prevent double taxation and also plug many loopholes that were found in the traditional sales tax system.
If you are 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. Now you can collect and pay uk vat whilst claiming any vat previously paid on imported products or services, which in turn will lower tax overheads to some large extent.