If 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. 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 enhance your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. In case you have started a fresh business in the United Kingdom and have touched ?70,000 pounds in taxable sales in the past 12 months 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 done as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration your costs could increase slightly, and when you sell your products or services locally in the UK at a retail level then you may opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities simply to remain away from system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several benefits of entering the vat system since it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services in another country too.
The whole process for registration for vat is quite simple however, if you aren’t sure about yourself then you should simply appoint a professional vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply for vat through your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then this procedure for approving your application typically takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will have to take into account applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from their end.
As soon as your application is eligible you will receive your unique vat registration number and may 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 along with your vat no at the top. You will have to provide a summary of all vat paid and collected within your vat returns which will have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can 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 online vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.