If you are a trader in the United Kingdom or other EU country which has adopted or value added tax as a method of collecting taxes then for selling to vat registered traders it makes sense to register for vat. You will be able to pass on vat benefits to the customers whilst having the ability to reclaim vat that may have previously been paid in a foreign country.
In the United Kingdom you are able to register as being a vat registered trader regardless of whether you are an individual running a business, a partnership, a club, a company, an association, or other http://vatnumbers.com type of organisation. Basically, for anyone who is dealing in services or goods that attract vat then you can certainly get registered for vat. In addition, if most of your customers are vat registered dealers it definitely makes sense for you to continue the vat tax chain and turn a vat registered dealer.
In case your taxable sales cross over the vat threshold limit of ?70,000 in the previous Yr then you’re qualified to apply for vat registration. However, you can also volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an efficient way of taxing goods and services to be able to prevent the problem of double taxation as well as create transparency within the tax system. If you’re planning to import services or goods into the UK and then sell them locally then you can also make an application for vat refunds as soon as you become the official vat registered trader. You will need to apply at the HM revenue and customs department or hmrc department, which inturn will forward your refund application to the concerned eu country.
Once you register for vat with the hmrc department and turn into an official vat registered dealer then you’ll need to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount within the invoice. UK has 3 kinds of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some products or services with a social impact are also vat exempt. You will first have to check as to which vat rate pertains to each product or service before you start issuing vat invoices and start charging the applicable rates.
The vat rules in several eu countries which have adopted vat are slightly different and if you plan to import goods from such countries then you need to understand much more than merely what exactly is vat. A professional vat agent with plenty of understanding of customs and excise duties that also knows all about uk vat and eu vat rules ought to be hired for smooth import of goods and services into the UK. Once you turn into a vat registered dealer then you’ll definitely also need to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will be unable to claim any vat refunds.
The hmrc offers vat registered dealers an opportunity to file their vat returns online itself. Your agent can also file the return for you. However, before you become a part of the vat cycle you need to first register for vat in order that you too can enjoy all tax benefits offered by this tax system.