If you are a trader in the United Kingdom with rising taxable sales then you need to pay uk vat to relish all benefits provided by this taxation system Www.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 too can become part of this tax system that is in effect in most 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 don’t touch ?70,000 in Twelve months. However, if your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off being a vat registered trader in the UK. Vat continues to be employed as a means 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 United Kingdom is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk VAT then you’ll have to make an application 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 foreign eu country where this method is followed. You should hire the services 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 to ensure that there are no problems in claiming back vat.
As soon as you do turn into a vat registered trader in the United Kingdom, which could extend to 30 days once you file a web-based vat application then you’ll have to charge vat as per the 14,000 goods and services classifications given by the hmrc vat department. This will need to be carried out by each vat invoice you will be required to issue during each taxable sale. UK has 3 vat rates starting 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 are a vat registered trader in order to pay and collect uk vat based on vat invoices then you will also have to file your vat returns regularly. Again, your vat agent is going to be required to calculate vat to be paid or refunded depending on your vat purchases and sales. In case you have imported services or goods 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 avoid double taxation and also plug many loopholes that were present in the conventional sales tax system.
If you are a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by turning into a vat registered trader. You can now collect and pay uk vat whilst claiming any vat previously paid on imported goods and services, which will will reduce your tax overheads to a large extent.